by Francois Becker
Nick Reilly
Opel unveils turnaround plan, 8,300 jobs slashed
Troubled automaker Opel laid its cards on the table Tuesday with details of a restructuring plan that will involve 8,300 job cuts and require billions of euros (dollars) in state aid.
Opel boss Nick Reilly delivered a long-awaited programme for the ailing General Motors unit and its 50,000 employees during a press conference that paved the way for talks with governments in several European countries.
"We have no time to waste," Reilly said in Frankfurt, near Opel's headquarters in Ruesselsheim.
He added that, with the new plan, "we expect to break even in 2011 and make a decent profit in 2012."
GM is to contribute 600 million euros (825 million dollars) and is asking countries that host Opel and its British sister brand Vauxhall to stump up another 2.7 billion euros.
Reilly said he had officially submitted the plan to the German authorities and was set to begin negotiations with officials in Berlin.
The German economy ministry said it had received a request for 1.5 billion euros in financing for the plan, which is also to be submitted to European competition authorities before being finalised.
Talks will probably be long and difficult, however.
The head of the German state of Hesse, where the Ruesselsheim plant is located, called immediately for GM to plough more of its own money into the restructuring.
"According to our first impression, it will be necessary for GM, as the owner, to considerably increase its contribution to the restructuring," state premier Roland Koch said.
Reilly noted however that having itself been bailed out by Washington, "the cash that is in General Motors is essentially US taxpayers' money.
"It is not surprising that the United States would expect Europe and European governments to help a European entity and not have the US taxpayer pay for all of the restructuring and growth of Opel," he said.
GM initially decided to sell Opel/Vauxhall but changed its mind after its own rescue by the US government and has decided to turn the European unit around itself.
Germany had favoured a sale of Opel to the Canadian auto parts maker Magna and its Russian partner Sberbank.
Opel must also get trade unions on board and Reilly said: "I fully respect the necessary role of unions in these difficult decisions.
"At the end, we both want the same thing, a successful company,"
The powerful IG Metall union rejected the plans however, calling for job guarantees and the reversal of a decision to close an Opel plant in Antwerp, Belgium.
A union statement forecast that "the plan will not get backing from the Federal government either."
Talks are expected to last several weeks, during which time Reilly said Opel had enough cash to continue operations.
The company confirmed it intended to eliminate 8,300 jobs, with Germany set to lose more than 3,900 from its total of 24,300.
Belgium would pay a high price, with the closure of the Antwerp site resulting in the loss of 2,377 jobs, while Spain is likely to lose 900 and Britain more than 500.
By 2014 Opel plans to invest 11 billion euros in new models and environmentally friendly technology such as electric powertrains.
According to a study by independent auditors demanded by German authorities "the plan is financially sound and offers a realistic roadmap to renewed business success," Reilly said.
AFP
