Talks are ongoing between Opel and its workers to reduce their hours at its main Ruesselsheim plant in response to the dwindling demand for cars in Europe. Opel could get government subsidies to compensate for the lost wages of its employees. In 2011, GM reported $747 million in losses on its European operations.
Auto sales in the region had fallen because of the weak economy, compelling automakers to deal with high fixed costs and excess production capacity. In a statement last Thursday, Opel said that the "deteriorating market situation in Europe" had resulted to negotiations with the works council and labor union IG Metall because of fewer working hours.
Opel said that talks are likely to end soon for shortened working hours in Ruesselsheim, which produces the Insignia mid-sized and Astra compact cars. Opel’s plant in Ruesselsheim employs nearly 14,000 people. Of this figure, about 3,500 factory workers would probably be affected. According to a spokesman, it’s not known yet just how many working hours may be cut in administrative jobs.
Sources told German daily Allgemeine Zeitung Mainz that Opel was also thinking about cutting the working hours at its factory in Kaiserslautern, Germany. There are 2,500 workers in this plant. The location of Opel’s production plants are in Ruesselsheim, Bochum, Kaiserslautern and Eisenach, Germany.
Last June, Opel made a move towards profitability with its supervisory board approving a medium-term business plan that is effective until 2016. These plans include "massive" product investments, a revised brand strategy, am improvement in exports, cuts in material, engineering and development costs and additional savings from the alliance with France's PSA/Peugeot-Citroen.