General Motors says today the supervisory board of its Adam Opel European subsidiary, which includes representatives from the local workers union, has voted in favor of a previously announced business plan aimed at saving the struggling German auto maker.
The plan includes closing an assembly plant in Bochum, Germany, in 2016, likely one of the stickiest points because it puts 3,100 jobs in jeopardy. In return, GM pledges to its labor unions that it will not conduct any layoffs until Bochum goes dark.
The plan also calls for product investments by GM in Opel, as well as a new go-to-market strategy, refined export- and market-expansion plans and a roadmap for reducing production costs that includes further leveraging the U.S. auto maker’s new partnership with PSA Peugeot Citroen of France.
GM continues to characterize reports of deepening the PSA partnership by manufacturing cars for the French auto maker at its Russelsheim, Germany, assembly plant as “speculative.” Russelsheim recently lost production of the Astra small car to GM’s Vauxhall unit in the U.K.
“The plan we approved today paves the way for Opel’s strong future,” GM Vice Chairman Steve Girsky says in a statement. “GM stands behind Opel, and encourages both its management and employee representatives to continue working together to better satisfy customers and return quickly to profitability.”
Wolfgang Schäfer-Klug, chairman of the European Employee Forum and vice chairman of Opel’s supervisory board, calls the plan “a good basis for the future of Opel,” adding the auto maker “must focus on its strengths in order to grow and secure jobs even in a difficult market environment.”
The European new-vehicle market remains depressed as the region struggles to recover from the global recession and deal with sovereign debt problems that threaten to unravel the eurozone. Vehicle sales are expected to decline again this year and are not forecast to return to normal levels until as late as 2020.
GM Chairman and CEO Dan Akerson previously said Opel, which the company nearly unloaded in bankruptcy three years ago, would not be saved by cost-cutting alone and would need investment in spite of the economic headwinds.
The auto maker has not said how much money it might take to turn around Opel, which plays an important role in GM’s product engineering. The European unit has lost $3.8 billion since 2009 and has dragged down the value of GM’s U.S. stock since it returned to trading in 2010.
The vote for Opel’s future comes amid grumblings over the GM-PSA alliance by the Peugeot family, which reportedly objects to further deepening the partnership. The alliance is seen executives for the two auto makers as a key cost-saving element of their respective turnarounds.
The plan for Opel also appears to cover ground where GM previously has been unsuccessful. The auto maker has tried to export Opel models to other markets, but scrapped the efforts when profits failed to materialize.
GM wants to grow its Chevrolet brand in Europe as well, and that could lead to competition with Opel.
GM nearly sold Opel in 2009 to a consortium of investors led by global parts-making giant Magna, but killed the deal at last minute after deciding it would need to restructure the auto maker on its own.
In addition to accounting for a sizable piece of GM’s presence in the Western European market, Opel also serves an important research and development role.
