Opel's parent General Motors Co. has announced on Thursday a cost-saving agreement with PSA/Peugeot-Citroen. As revealed by an insider on February 28, the accord will include job reductions at the two carmakers. This leaked information raised uncertainty about the future of the Bochum facility in Germany as well as the Ellesmere Port, England plant, which is operated by Opel's sister brand Vauxhall.
In the past few years, the two plants have been in limbo amid rumors that they would be closed. Now, Opel workers in these facilities may be rivals for survival, waiting and worrying in the process. On the other hand, the two automakers are considering the job cuts as a strategy to change the fate of a long history of bad results.
Konrad Goretzka, who works as an electrician at the Opel vehicle facility for more than 30 years, shared that he would never advise his son to start a career at Opel. Goretzka started as a trainee in Opel in 1978. He hopes that his son will not be left relying on the Opel plant for a job. Last year, the automotive division of PSA lost 92 million euros or $123 million. Since 1999, the operations of GM in Europe have lost $15.6 billion.
This scenario has been a drain on GM's positive developments in other markets. GM reclaimed the title of the No. 1 vehicle manufacturer in the world last year. It has also posted a record annual profit of $9.2 billion. With vehicle demand in Europe estimated to decline again this year for the fifth straight year due to the sovereign debt crisis, the automakers decided they had to take action now.