Some Opel plants in Germany cost twice as much to run as PSA Group's other factories, Opel's chief executive reportedly told employees.
Attempting to trade an efficency deal with labour leaders in return for investments, Opel CEO Michael Lohscheller spoke at a town hall meeting as chancellor Angela Merkel intervened to say she expected PSA to honour commitments made during the 2017 takeover.
Go deeper with GlobalData
Discover B2B Marketing That Performs
Combine business intelligence and editorial excellence to reach engaged professionals across 36 leading media platforms.
According to a Bloomberg report, the future of the Eisenach plant, which employs 1,800 workers, is at stake. Shop stewards earlier this week rejected wage concessions demanded by PSA in exchange for a commitment to invest in a production line for a new model.
Lohscheller told the in Ruesselsheim profitability was improving but added: "In part, our factories were twice as expensive as PSA factories."
Bloomberg noted Opel, which PSA bought from General Motors for $2.6bn, has booked losses for almost 20 years and PSA CEO Carlos Tavares has been frustrated in his bid to cut high production costs.
Opel's German sites have so far been excluded from PSA's investment plans and management has demanded workers in Germany forego a Christmas bonus and other benefits to help increase efficiency.
But the powerful German labour union IG Metall has said PSA's cost targets per vehicle cannot not be met without management's making concessions on pay and have demanded that Opel management fulfil a pledge of allocating more production to Eisenach.
According to the Bloomberg report, Spiegel magazine, citing IG Metall sources, reported Opel would need to cut the workforce at Eisenach to 1,000 from 1,800 if existing production plans were implemented and no new models were added.
