GM's Opel, Staff Close to Deal on Shorter Work Week

Opel, the German unit of U.S. automaker General Motors (NYSE:GM), is close to signing an accord with workers to cut their hours at two German plants employing a total of 16,500, a spokesman for the carmaker said on Monday.

GM lost $747 million on its European operations last year as a weak economy hit car sales in the region, forcing carmakers to confront high fixed costs and excess production capacity that GM has said equates to 10 plants.

As sagging consumer demand curbs Opel deliveries in austerity-strapped southern Europe, management at the Ruesselsheim-based carmaker is making use of a clause in wage contracts to cut employees' standard 35-hour work week to 31 hours.

If management and labor agree to shorten working hours at the main factory in Ruesselsheim and a component plant in Kaiserslautern, Opel can apply for subsidies under the German government's short-work program, called "Kurzarbeit".

The talks are due to be concluded on Wednesday, and it remains unclear how many workers would be involved and exactly how their hours would be reduced.

A pact to shorten the standard workday or work week at the two western German plants could be signed within the week, allowing for implementation on September 1, the Wall Street Journal reported on Monday, citing unidentified people familiar with the matter.

The spokesman declined to confirm whether possible new rules on shorter working hours would take effect on September 1.

Opel's wage contracts also allow it to increase weekly hours to as high as 38.75 to work off excess orders if demand is strong.