Opel confirms German plant will close in 2016

[DOCTOR]

Opel confirms German plant will close in 2016
Automotive News
December 10, 2012

Opel confirmed it will close its Bochum plant in Germany in 2016 when the current version of the Zafira minivan is replaced, as the automaker does not expect Europe's auto market to recover soon.

The General Motors Co. unit will look to develop the site's component and distribution operations in an effort to reduce job losses, Opel said. The plan is part of Opel's goal to become profitable by the middle of the decade.

In June, Opel said it would not build the Zafira successor at Bochum. "Despite rigorous efforts, there was no success in changing the situation. The main reasons are the dramatic declines in the European car market and the enormous overcapacity in the entire European auto industry," Opel said in a statement on Monday.

Steve Girsky, GM vice chairman and acting president of GM Europe, said in the statement that the company will negotiate with the factory's works council to try and avoid forced lay offs before the run-out of the current Zafira.

Opel said it will preserve some jobs in its Bochum warehouse and that it is talking to employee representatives about allocating new component production to the region.

The Bochum factory, which is in Germany's Ruhr valley manufacturing area, employs 3,300 workers.

GM expects its European operations, which include the Opel and Vauxhall brands, to lose between $1.5 billion to $1.8 billion this year.

Auto executives in Europe have said this year that they don't expect industry sales to recover before 2014.

Full article at link.

[DOCTOR]

This was the Opel press release issued today.

Warehouse to remain in Bochum and probably to be expanded
New component production could be allocated in Bochum
Initiative „Bochum Perspective 2022“ to secure existing and create new jobs
Goal: No forced redundancies before run-out of current Zafira
Attractive separation packages
Germany stays backbone and home of Opel
Announcement is part of long-term plan “Drive! 2022”

Ruesselsheim. Adam Opel AG management today informed its employees that vehicle production is planned to end in Bochum at the end of the current Zafira lifecycle – expected in 2016. In June, Opel announced that no successor to the current Zafira is planned to be allocated in Bochum in view of the shrinking European car market and the overcapacities in the automotive industry. Despite intensive efforts this situation could not be changed.

The warehouse in Bochum will continue to offer jobs beyond 2016 and could be expanded. Additionally, Opel is negotiating with the employee representatives to allocate a new component production in Bochum. On top of this, the working group “Bochum Perspective 2022”, which was recently established by Opel, has the objective to focus on site development, to secure existing jobs and create new ones in the City of Bochum and the entire Ruhr region. “Bochum Perspective 2022” is composed of representatives of local and regional government, along with leaders and innovators from labor, industry, academia and financial institutions located in North Rhine-Westphalia. Opel will support the initiative financially and personnel-wise.

“Building on the Bochum Perspective 2022, we have a clear goal for securing a significant number of tariff-bound jobs at Adam Opel AG. They include positions in our warehouses and potentially component production. Opel takes its responsibility seriously and will implement still-necessary job reductions in the most socially responsible way. The goal of our negotiations with the works council is to refrain from forced redundancies before the run-out of the current Zafira,” said Steve Girsky, GM Vice Chairman, Chairman of the Opel Supervisory Board and Acting President of GM Europe.

"Germany is our most important market and with about 20,000 employees the backbone and home of our brand. And this will stay this way in the future,” Opel Deputy CEO Dr. Thomas Sedran said. Opel also has the responsibility for its independent dealers; in North-Rhine-Westphalia alone there are 320 Opel dealers who employ about 5,300 employees.

This move is part of the company’s long term plan “Drive Opel 2022” which targets break-even results by mid-decade. Opel plans to increase its revenue and variable profit significantly by more cost-efficiency, re-focusing its go-to-market strategy, improving the image of the Opel brand, strengthening the quality of market share and entering new markets and segments. From 2012 to 2016, Opel will launch 23 new models and 13 new engines in total.

[RoyG]

Here's a thought. Given the lower labor costs in the U.S (compared to Germany), start assemblying the Zafira at a US plant. Lots of benefits - more employment, lower costs, the US market gets a monocab 7 seater that's won a lot of awards. Zafira would be an excellent Buick. GM should do what BMW and Mercedes already do in the US - use their US assembly as an export base to the rest of the world.

[Ruperts Trooper]

GM should do what BMW and Mercedes already do in the US - use their US assembly as an export base to the rest of the world.

The BMW and Mercedes models built in the US aren't perceived to be as good as the models built in Europe.

GM sold the US-built Sintra in Europe but it was so badly built it was quickly withdrawn.

By US standards the Zafira is too small as a 7-seater - it works in Europe because smaller is acceptable. Europe gets a 7-seat version of the Hyunda Santa Fe SWB but is only sold as a 5-seat in the US, needing a LWB version to accomdate a 3rd row - The Santa Fe SWB is bigger than Zafira.

[mchicha]

The North American market could use some products for Buick from Germany.

[spd98]

This is just a sign of the times. The issue is that we're still talking future job losses. It's going to be really hard to really have economic recovery and unemployment down when we're still loosing jobs overall. The market won't turn around until companies are leaner and in turn companies lay people off to become leaner and make a profit. It's a tough cycle to break.

[spd98]

The North American market could use some products for Buick from Germany.

why would we build cars there when we can do it here at a cheaper cost?

[MechEng]

Here's a thought. Given the lower labor costs in the U.S (compared to Germany), start assemblying the Zafira at a US plant. Lots of benefits - more employment, lower costs, the US market gets a monocab 7 seater that's won a lot of awards. Zafira would be an excellent Buick. GM should do what BMW and Mercedes already do in the US - use their US assembly as an export base to the rest of the world.

Voltec Zafira on the D2XX platform. Make it a Buick. Sell it Globally.

DO IT GM!

[OliverH]

Voltec Zafira on the D2XX platform. Make it a Buick. Sell it Globally.

DO IT GM!

Is that typicall American thinking? I only try to understand the faults in the story of GM and decisions are currently taken again.

If someone wants to sell globally he has to operate globally. GM has given Opel no oppertunity to use the BRIC countries, Opel was hit by European economy and has a mother which forth the business to struggle. As a customer of Opel I would think twice to buy again an Opel because of no clear strategy. Hidden agenda will be destroying Opel/ Vauxhall and try to push this Asian/ US mix of Chevrolet/ Daewoo. This will fail, GM will lose market share in Europe.

I think German gov will not burn money to get live extension into the German plants. GM should start to write off the European assets. There will be no one to buy the plants.

Is GM itself ready for global sales? I don't talk about of only US friendly markets (big cars, V8,..). I think GM itself has not the needed technology and mindset in place. The board of GM need urgent global thinking and not only US thinking. Hard to say such things on a GM/ US based forum.

[Ruperts Trooper]

Is GM itself ready for global sales? I don't talk about of only US friendly markets (big cars, V8,..). I think GM itself has not the needed technology and mindset in place. The board of GM need urgent global thinking and not only US thinking. Hard to say such things on a GM/ US based forum.

That's been said many times, both within GM Europe and within the European customer base - but it's continually ignored. The first lesson that any global business needs learn is to recognise is that there are many different markets with disparate and often opposing needs.

The major Koreans, ie Hyundai/Kia understand this very well and have several design/research/development units around the world staffed by LOCAL experts who understand their own markets. They also understand like the other German brands, ie not Opel, as well as the Japanese brands that you have to manufacture in markets you sell into - that's why most brands manufacture in the US for the US market as well as in Europe for the European market - each plant doesn't build every model sold locally so vehicles are being exported both ways.

Hyundai/Kia are the world's 3rd largest car maker, having overtaken Ford, and Hyundai/Kia market penetration continues to grow - GM globally are in danger of being overtaken by the upstarts from the Far East.

Given the current world-wide model line up and the current lack of strategy, GM will soon be fighting with Ford again - but it'll be for 3rd place not 1st.