Angry German workers are protesting on Thursday after General Motors said it would cut some 10,000 jobs at Opel in a move slammed as a slap in the face for chancellor Angela Merkel.
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GM wants to slash costs by 30% at Opel, which would mean the elimination of about 10,000 jobs from a workforce of around 50,000, GM vice president John Smith said.
The Wall Street Journal said that, under a revised restructuring plan, GM was mulling keeping open a downsized version of its plant in Bochum, in a region of Germany that is politically important to Merkel. Although GM still plans to close its Antwerp plant in Belgium, and likely idle its Eisenach plant in Germany, Smith was quoted as saying there could be hope for Bochum.
The announcements came after GM scrapped plans to sell a majority stake in Opel to a consortium led by supplier Magna. That would have led to the loss of about 10,500 jobs.
Mass-selling Bild newspaper said: “The Americans duped everyone.”
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By GlobalData“It is truly tragic,” wrote the Berlin daily Der Tagesspiegel, calling the decision a “stinging slap in the face” for the chancellor, AFP reported.
The news agency noted Merkel’s government had invested major financial and political capital in saving Opel from insolvency before a September general election which she handily won. About half the company’s employees work in Germany.
Beyond pledging EUR4.5bn (US$6.6bn) in German state aid for the ailing company, Berlin spent months shepherding a rescue deal.
Economy minister Rainer Bruederle fumed that GM’s U-turn was “totally unacceptable” while North Rhine-Westphalia state premier Juergen Ruettgers said the move showed “the ugly face of turbo-capitalism”.
GM has now warned employees and unions that it could still allow Opel to flounder if the workforce upholds its threat to refuse wage concessions – a move blasted as “blackmail” on Thursday by the daily Sueddeutsche Zeitung.
The company also estimated it would need EUR3bn in state aid, and was confident it could secure the sum from the German government and other European countries where Opel and its British Vauxhall division have plants.
Relations were a little more conciliatory in the UK.
Britain’s biggest trade union said it was keen to work with General Motors to ensure job cuts were voluntary.
“I have no doubt that whoever the owner would be, there will be major restructuring of GM operations,” said Unite joint general secretary Tony Woodley.
“Inevitably some will go in the UK, but our task is to minimise the number of jobs lost and ensure that those who do go, go voluntarily.
“It is right that GM should hold onto its UK plants because this country is one of its strongest and most loyal customers,” he added.
The British government said on Wednesday it wanted to hold talks with GM after it scrapped plans to sell Opel.
US President Barack Obama’s spokesman insisted his government had nothing to do with the about-face.
“Business decisions by GM are made by the corporate leadership at GM and not by anybody at the White House,” spokesman Robert Gibbs told AFP.
But the Sueddeutsche newspaper was sceptical.
“Perhaps (US President Barack) Obama genuinely wasn’t in the picture when he received Merkel in the White House (on Tuesday), although this doesn’t say much for him,” it said.
“Perhaps he did know something, and that would put him in an even worse light. In any case, with their inconstancy the GM managers have caused serious damage to German-US relations.”
GM’s Smith acknowledged that “the German government had a very strong appetite for the Magna proposal, so I can well imagine and well understand” the German reaction.
“I am hopeful they will find merit in our plan.”
Smith contended that there had been very little difference between the offers put forward by Magna and a rival bidder, the Belgian investment firm RHJI, and what GM has in mind for Opel.
But he added: “We continue to believe that we can restructure Opel with less money than any other investor.”
