Bumpy road ahead for Opel and Vauxhall

Posted on 8 Feb 2012 by Tim Brown

Further restructuring may be on the cards at both Opel and the UK’s Vauxhall following revelations that that the General Motors European subsidiaries have lost $14bn since 1999.

Opel’s Works Council says it has no information the European automaker will renege on its deal to not force a series of site closures and redundancies. But a GM official allegedly told the Wall Street Journal that there “is increasing frustration with Opel and a feeling that the cuts two years ago did not go nearly deep enough. If Opel is going to get fixed, it is going to get fixed now and cuts are going to be deep.”

The automaker lost $580 million in Europe through the first nine months of 2011, and is expected to report even worse losses for the fourth quarter on February 16.

The GM management is reportedly fast “losing patience” with its struggling German subsidiary, and preparing yet another overhaul for Opel that will include major plant closures and job losses.

Negotiations include the possible closure of a factory in the western German town of Bochum, where it employs about 3,100 workers. To offset the job cuts, GM may move some production from South Korea to Germany, the Journal said.

The Detroit-based company’s plans to save Opel were stopped dead last year by the eurozone debt crisis leaving it with bigger losses than expected in the last quarter of 2011. Responding to the reports, a GM spokesman said: “We are very committed to making Opel successful again.”

As yet no details have been revealed regarding GM’s upcoming plans for its UK Vauxhall factories.