GM Europe and the Opel Supervisory Board have today approved a long-term plan for viability that will be submitted to government representatives ‘in the coming days’.
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The confidential comprehensive document includes a funding request for EUR3.3bn in government support (German and other governments), EUR3bn in support from GM and US$1.2bn in structural cost reductions. Through the restructuring and using conservative market assumptions, GM Europe/Opel would become profitable by 2011, GM Europe said.
GM is working with representatives of the German government to answer questions and provide additional information that may be required to move the funding process forward.
“The discussion with governments is being driven by the exceptionally weak economic situation that has seriously eroded consumer demand for vehicles and shut-out the availability of credit for financing operations,” said GM Europe President Carl-Peter Forster.
“We’re moving to restructure our business with as minimal an impact on jobs as possible, but the reality is that we’re in an exceptional economic situation and the issue of plant closings must be considered.
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By GlobalData“We will work with our labor representatives to find the best way forward in mitigating the societal impact of the restructuring, but it should be made clear that we need all three parts of the plan to be viable – the structural cost reductions, government support and GM support. Anything short of this will not result in a viable operation,” he continued.
In a statement GM Europe said that it remains open to discussions on partnerships, equity positions or other alignments that will strengthen the relative position of Opel/GM. Opel remains an integral and important part of GM’s global operations and will continue as such in the future, it said.
Reuters reported that the plan will permit the involvement of outside investors to a stake of more than a quarter.
“There are still no decisions about plant closures or forced layoffs,” Forster said.
Management at Opel earlier presented its supervisory board with the plan that could involve plant closures and the loss of thousands of jobs.
The SB meeting followed a big demonstration yesterday involving thousands of workers at the firm’s Russelsheim production centre.
Demonstrators yesterday called for an independent Opel and carried placards with slogans such as “Yes we can, even without GM” and “Free Opel”.
Reuters reported that GM Europe labour leader Klaus Franz wants to share job cuts across plants like Germany’s Bochum, Antwerp in Belgium and Ellesmere Port in Britain, to save any single site from being closed.
“This is an important day for Opel and for the German economy. I want to say one thing which is important to me: I can’t imagine a concept that would assume the closure of an Opel site in Germany,” said the premier of the state of North Rhine-Westphalia, Juergen Ruettgers.
Ruettgers said last week no decision had been taken in GM’s Detroit headquarters to close an Opel plant. He spoke after a meeting with GM chief executive Rick Wagoner to discuss the future of Opel’s Bochum plant, located in his state.
Opel dealers have signalled a willingness to help secure their livelihoods by taking some form of equity stake in an independent company, Reuters said.
Klaus Franz also attacked management for booking profits in the United States stemming from Chevrolet sales in Europe. “Opel is not the disaster, GM is the disaster,” he said.
There are also reports that a GM Opel plant – Eisenach – could be sold to Daimler.
