The closure of Opel’s Bochum factory in Germany could cost parent company General Motors at least EUR550m (US$754.41m), sources have told the Reuters news agency.
That will be the cost in terms of severance payments and early retirement for the 3,300 employees in Bochum alone. Cleaning up the factory site and the transfer of tooling to move manufacture of the Zafira to the Opel’s Russelsheim factory, also in Germany, will be an additional expense.
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The Frankfurter Allgemeine Zeitung reported senior management at Opel has signed off on the EUR550m restructuring sum. Last October, Dan Ammann, now president of GM, said GM would incur “significant” restructuring costs for closing Bochum by the end of 2014.
He described 2014 as a “transition year” in Europe as the company seeks to bring its European operations back to break-even. In April last year, Opel approved the closure of its factory in Bochum.
The plant closure is part of a strategy to achieve profitability in 2016 after more than a decade of losses in Europe.
