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September 14, 2009

OPEL AFTERMATH [updated 16:55BST]: German job loss estimates rise as Belgium frets

Some 'creep' is starting to appear in the reported number of jobs likely to be lost in Germany should the Magna Sberbank bid for Opel and Vauxhall proceed to completion after getting the green light from General Motors' board last week.

Some ‘creep’ is starting to appear in the reported number of jobs likely to be lost in Germany should the Magna Sberbank bid for Opel and Vauxhall proceed to completion after getting the green light from General Motors’ board last week.

The headline figure has been roughly 10,000 Europe-wide with German officials saying in May that Magna’s proposals envisaged some 2,600 job cuts in Germany, with between 7,500 and 8,500 going elsewhere in Europe.

But recent reports suggested 4,100-4,500 of the total may go in Germany while Magna’s co-chief executive Siegfried Wolf was widely quoted as saying in Frankfurt his firm “may” cut as many as 10,500 jobs at Opel and Vauxhall and that the reduction could take over a year to implement. That’s an additional 500 on the total.

The Frankfurter Allgemeine Sonntagszeitung (FAS), citing a Magna spokesman, said 4,500 were anticipated while weekly Der Spiegel put the job losses at Opel in Germany at 4,100 in an unsourced report, saying the consortium buying a controlling stake would “eliminate 3,000 jobs in production and 1,100 in administration”.

Germany’s economy minister Karl-Theodor zu Guttenberg has also said that there could be more job cuts than originally expected, according to news agency AFP.

“Since spring, it was known by all the parties, including representatives of the (Opel) employees, and from the information I was given, that the number (of job cuts) mentioned by Magna only concerned the productions sector but other job cuts were feared in administration,” Guttenberg reportedly told Bild am Sonntag.

“The central administration at Ruesselsheim won’t be spared,” Roland Koch, head of the Hesse regional government, referring to one Opel facility, told the FAS.

Government spokesman Ulrich Wilhelm on Monday said a planned cut of 1,500 administrative jobs had been known and would come on top of cuts at production sites.

“So far, it hasn’t been decided how exactly these 1,500 administrative jobs will be distributed between administrative units of the locations and production sites in Europe,” Wilhelm said. “Talks are still ongoing. But this doesn’t affect the preservation of all sites in Germany that has been promised by Magna.”

As fears rose Magna would sacrifice the 2,700-worker Opel Antwerp plant to meet its promise in Germany, the head of Belgium’s Flanders regional government took the case to the EU’s executive arm.

Seeking assurances that politics would play no part in Bussels’ decision on whether or not to approve the aid and the takeover, Kris Peeters told EU Commission vice-president Guenter Verheugen of Germany that Antwerp would win out on purely economic and commercial considerations.

“For Commissioner (Verheugen), there can be no question of protectionism and he will keep a close eye on this to make sure economic parameters lie behind decisions on whether to close or keep sites open,” the Flemish leader told reporters.

Peeters said submissions on aid and on the comparative merits of the different plants within Europe which may be affected have yet to be submitted.

“But when these reports are received, it has been confirmed to us that (only) economic arguments will be taken into account,” he added.

German news magazine Der Spiegel has reported that a comparative analysis of competing sites gave Antwerp a higher productivity rating than one of the four Opel factories in Germany, in Bochum.

A commission spokesman denied being in receipt of any such material and stressed that politics would play no part in its decision.

“Decisions such as these must only be taken on economic and commercial grounds, and not for political reasons,” he said, adding that the dossier would be checked to ensure competition rules were “scrupulously respected.”

Opel has about 7,000 employees in Spain, 4,700 at Vauxhall in Britain, 5,500 in Belgium, 1,800 in Italy, 1,600 in Austria and 1,500 in France, according to GM Europe’s website.

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