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April 27, 2010

COMMENT: Opel looks to move forward from Antwerp

Today's news that workers at GM's troubled Opel plant in Antwerp have voted to accept the company's 'pre-agreement' is at least progress.

Today’s news that workers at GM’s troubled Opel plant in Antwerp have voted to accept the company’s ‘pre-agreement’ is at least progress.

The 1,200 or so personnel who now face imminent redundancy – although this may well be voluntary – may not view it as progress – but Opel’s management led by Nick Reilly has never been less than 100% adamant it wanted its Belgian plant shuttered.

Those staff have at least enjoyed some protection under the Belgian ‘Loi Renault’ – perhaps now it will enjoy an updated moniker – that sees labour organisations permitted to put forward alternatives once a closure is announced but this may be of small comfort.

Nonetheless the vote, details of which are unclear and which ended at midnight last night, is at least an improvement. How many employees voted for the scheme is not yet known, but it now triggers a search – led by the Flemish regional government – to find a buyer.

But Opel hasn’t exactly set aside a great deal of time for this. The company has given the management/union/government combination only until September to find a potential suitor. And if that extremely tight timetable is not met, the plant – and its 2,300 employees – will simply close.

Opel’s ambitious plans to seek European state aid worth EUR1.8bn (US$2.4bn) sees no future for its Antwerp operation.

Indeed, the automaker is setting its sights firmly on those European governments with, it’s fair to say, a considerable amount of success and the politicians have not made too much noise about workers outside their jurisdiction.

The UK – right in the teeth of a general election – signed up pretty quickly to offer loan guarantees – although it remains unclear what the German government – in whose territory the leviathan proportion of Opel’s production lies – will do.

Germany is currently pre-occupied – seemingly irritated – by having to bail out Greece to the tune of untold billions of Euros. But German politicians will have to face German voters themselves next month and Greece or not, a significant amount of German jobs are at stake with Opel.

But closer to Belgian minds will be the future of the Antwerp site. Reilly’s mind already seems to be moving towards resolution of his plans to reduce costs on a European level – possibly involving further job losses – and away from Belgium.

And his comment today that the Antwerp plant “is situated in a prime location in the port of Antwerp and should be of interest to a variety of potential businesses,” is not exactly a ringing endorsement of its future.

But what else could Opel do? Haemorrhaging business in the economic hurricane, it has wielded the axe on unfortunate Antwerp and is now asking for state assistance for its other European operations – although on a basis that would not even register on a Greek scale.

Now it remains to be seen how Opel’s competitors will view any state help. There have already been grumblings from one major US manufacturer and there may be more, arguing this represents a classic European interventionist stance versus a liberal economics standpoint from across the pond.

Although that certainly won’t be GM’s view.

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