FRANKFURT – Top executives from General Motors who sit on the board of loss-making European brand Opel are meeting on Wednesday to approve the first closure of a German car factory in decades.
As part of a comprehensive turnaround plan, Opel will end producing Zafira MPVs at its 50-year old Bochum plant by the end of next year, a move that has triggered a rare and public split within union ranks following months of tough negotiations.
The closure, which will lead to the loss of 3,000 jobs in Bochum, north-western Germany, is a key element in management's strategy to achieve profitability in 2015 at the earliest after what will then be 15 straight years of losses for GM in Europe.
Carmakers across Europe are cutting production to cope with plunging demand in an ailing economy. Data on Wednesday showed European car sales fell 10.3 percent in March.
Labor leaders in Bochum, a former coal mining town in the economically depressed Ruhr region, believe colleagues at Opel's other three German plants were all too willing to sacrifice Bochum in order to save their own factories.
Betting GM would not take the unusual and costly step of shifting production and tooling of the Zafira prior to 2017, the Bochum works council led opposition against a compromise deal that would have kept the plant running through the end of the model's life-cycle.
"General Motors said they were willing at most to keep 1,200 people on board, but nothing was set in stone. It never made any concrete binding offer to the workforce, so our entire staff would have had to hope they kept up their end of the bargain," Bochum works council head Rainer Einenkel, who also sits on the board of Opel, told Reuters.
Einenkel's three fellow works council chiefs, who have all since inked deals protecting their constituents from cuts, are now in the uneasy position of having to support Bochum's labor leader, from whom they have distanced themselves publicly.
"Unions on the board will vote against the closure even if Einenkel has not made himself any friends. As much as I think it would be a good idea to send a message, I don't think unions will abstain - that would be too much of an insult to the Bochum workforce," said a company source familiar with the matter.
Even if all the union representatives vote against the closure, however, the plan will be approved if it is backed by the other board members, as is expected.
Wednesday's boardroom decision will also likely mean that the historic home plant of Opel in Ruesselsheim will profit from Bochum's demise as company sources say it is set to build the Zafira during the last two years of the model's life-cycle.
"If a decision is taken tomorrow to shift production of the Zafira to another German factory for 2015 and 2016, then I hope the workforce would refuse out of solidarity to Bochum," Einenkel said.
(Reporting by Christiaan Hetzner; Editing by Mark Potter)