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Posts Tagged ‘Opel restructuring’

UAW’s King Joins Opel Supervisory Board

An ulterior motive?

by on Mar.30, 2012

UAW President Bob King.

Bob King, the President of the United Auto Workers Union, is taking on a new role as member of the supervisory board of Adam Opel AG, General Motors’ principal European subsidiary.

King was appointed Wednesday by IG Metall, the German’s metalworkers union, to serve as a representative on Opel AG’s Supervisory Board as a labor representiative – unions typical hold such seats in Germany but bringing onboard an American labor labor is a unique move. King’s appointment is effective June 1, UAW spokeswoman Michele Martin confirmed.

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King’s appointment to the supervisory board, which under German law has the authority to hire and fire Opel’s management and challenge its strategy, thrusts him into the middle of complicated negotiations between GM and Opel on one wide and IG Metall on the other.

After losing over $700 million last year, compounding a decade of losses, Opel is readying a turnaround plan expected to call for the closing of one, and possibly two of its assembly plants.  One is, in turn, likely to be in Germany.

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Opel to Cut 8,300 Jobs, Close Belgian Plant

Further cuts could follow as part of restructuring.

by on Jan.21, 2010

With Astra production to move elsewhere, troubled Opel is closing its plant in Antwerp.

At least 8,300 jobs will be cut and an assembly plant in Antwerp, Belgium closed, as part of a broad restructuring by General Motors’ troubled Opel subsidiary.

It had previously been reported that the company was considering the shutdown of two plants and at least 10,000 job cuts, so further moves could be in store as the German-based Opel takes aim at an underutilized manufacturing base and a bloated cost structure.

“Opel has to reduce its production capacity by 20%,” said Nick Reilly, Opel’s new CEO.  The job cuts and closure, he added, reflect “the tough reality of the current economic environment.”

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While some parts of Europe have been showing financial momentum, in recent months, much of the Continent’s southern tier, countries including Spain, Italy and Greece, are economic basket cases, and that’s translating into a perilously weak automotive market.

Reilly estimated 2010 European car sales would decline 1.5 million units compared to 2009 and would tally 4 million fewer than 2007.

But even without these problems, Opel has been struggling for a number of years and wouldn’t have survived without a bridge loan from the German government, last year.  In turn, Berlin pressed GM to sell a majority stake in the subsidiary before it would offer additional aid.  A deal with the Canadian mega-supplier Magna International fell through, late in 2009, when the new GM board decided Opel was too valuable an asset to relinquish.  The U.S. maker is now seeking alternative aid from European governments and pushing through a massive restructuring.

The need to trim production has been a given, for Opel, for more than a year, and the Antwerp facility was given little chance of survival considering it had been scheduled to lose production of the Astra, one of Opel’s mainstays.  The Belgian government had offered more than $700 million in aid to GM, hoping to stave off closure, but the bid was rejected.

It’s unclear if and when further cuts cut follow.

Strategic Risk for GM was too high to Sell Opel

An inside look at how GM’s new Board of Directors slowly came to the conclusion to reject a third party investor.

by on Nov.04, 2009

Opel brought this new logo to Frankfurt, along with a new slogan: "Wir Leben Autos," or "We Love Cars."

Opel introduced a new logo this fall with the slogan: "Wir Leben Autos," or "We Live Cars."

John Smith, GM’s chief negotiator on the sale of Opel to an outside investor, today defended the decision by GM’s Board of Directors on Monday to retain Opel.

What many observers characterized as a surprising reversal of the board’s direction in September to pursue such a sale, and a possible slap in the face of CEO Fritz Henderson, was fundamentally a strategic move  made possible as GM’s businesses improved in Europe and the U.S. compared to the beginning of the year when  the sale was first seriously  explored.

So rather than deal with the complications of outside owners taking over GM’s key small car and technology supplier and the core of its European operations, GM will now go it alone and “restructure Opel/Vauxhall more quickly and more successfully than any other investor,” Smith promised.

Such a strategy has large inherent risks, of course, since European governments and labor unions had already endorsed the taxpayer financing, plant closings and contract changes that were necessary to make the sale of Opel/Vauxhall to Magna viable.

Canadian parts supplier Magna International and its partner Sberbank, the largest Russian bank, offered €250 million, about $400 million, for a 55% stake in Opel.

However, the deal was complicated, and there were concerns over the security of Opel’s future product plans and its central role in GM’s global strategy.

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GM Board Balks and Decides to Retain Opel!

Control of product development and patents overrules speculators and GM's need for cash.

by on Nov.03, 2009

The Board of Directors at reorganized General Motors Company has decided to keep Opel and Vauxhall and will initiate a restructuring of its European operations “in earnest,” it said late today in a statement.

“GM will soon present its restructuring plan to Germany and other governments and hopes for its favorable consideration,” said Fritz Henderson, president and CEO. “We understand the complexity and length of this issue has been draining for all involved. However, from the outset, our goal has been to secure the best long-term solution for our customers, employee, suppliers, and dealers, which is reflected in the decision reached today. This was deemed to be the most stable and least costly approach for securing Opel/Vauxhall’s long-term future.”

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