Deal with management over the restructuring of Opel may come in 2-3 months

Article by Christian A., on May 10, 2012

Opel may soon return to profitability as labor leader Wolfgang Schaefer-Klug has announced that a deal with management over restructuring may be achieved in two to three months. Opel estimates that there were about 4,000 workers who participated at a demonstration in front of Opel’s plant in Ruesselsheim. Schaefer-Klug told reporters after the demonstration that it is “necessary and realistic."

The demonstration, a part of the strikes across the country, had halted operations for two hours. Meanwhile, German union IG Metall estimates that there were 8.000 staff members who went on strike. Opel’s purpose for the temporary walkouts is to emphasize its demands to get a 6.5% increase in pay for its workers in the manufacturing sector of about 3.64 million employees.

Opel is asserting that a salary increase will drive economic growth and give domestic demand a boost. IG Metall regional boss Armin Schild addressed the striking workers and told them that no other German company has more interest in higher wages in Germany and Europe than Opel.

Last March, Opel CEO Karl-Friedrich Stracke said that restructuring negotiations may continue for just two to three months. However, he said just last week that it would take two more months before the details could be divulged.

The problems that Opel currently faces are related to the slowdown in the euro zone. Opel is nearly totally dependent on a European mass car market that is likely to fall to a record low in 2012 as austerity programs hamper demand and make unemployment rates surge in countries like Spain where 25% of people are out of work.

Opel lost an average of $628 for each of the 1.19 million cars it built last year, since its fixed costs are geared towards selling an extra 500,000 vehicles. This is equivalent to two major manufacturing plants. Even rivals -- Fiat, PSA/Peugeot-Citroen and Renault -- are hurting because their production workers are mostly based in western Europe countries with high wages. [source: Autonews]

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