Last Monday, a restructuring deal for General Motors Co.'s Opel/Vauxhall unit was signed into effect, according to Opel labor leader Klaus Franz.
This deal was made in hopes of saving 265 million euros ($325 million) in annual wage costs through 2014. The master agreement, which was drafted on May 21, was signed by Opel CEO Nick Reilly as well as European union and workforce representatives from countries hosting Opel's major manufacturing plants.
Franz clarified that the signatures signified that no party can withdraw from the contract, removing apprehensions that it would be valid only if Germany agrees to cover 1 billion euros in loan guarantees.
Franz said that if Germany fails to provide state aid, the unions can "no longer be extorted." He also said that all the all the conditions and terms previously agreed had been adopted into a final binding agreement.
Franz revealed that all parties to the deal had signed except for the representatives from the Opel plant in Bochum. But Franz expects that they will sign soon.
Last Monday, there was a meeting in Berlin that was attended by business advisers to Germany's rescue fund to discuss if they will recommend extending loan guarantees to Opel.
So far, no announcement has been given with regards to the result of the talks. GM has asked for state aid from European governments to help fund a 3.7 billion euro turnaround plan at Opel that would lead to a 20% reduction in production and labor capacity.