Several thousand Opel workers will find their working days shorter as the GM subsidiary cuts hours at its Ruesselsheim and Kaiserslautern plants. The news comes in response to rapidly slumping economies and a dramatic decrease in demand for cars in Europe, an event that worsens Opel’s already loss-making position as parent company General Motors lost $747 million in the region last year.
About half of Opel’s 13,800 workers in Ruesselsheim — 3,500 in manufacturing, whose labor time will be reduced with short work shifts or short work days, and 3,300 in central/administrative functions, who will be faced with short work days — will be affected. Meanwhile, 2,500 employees at the Kaiserslautern component plant will be affected by 20 short work days. The reductions are set to begin in September and end at the end of the year. The remaining 7,000 workers at Ruesselsheim are in engineering and are not affected.
Now that Opel received the approval of the works council and labor union IG Metall for the temporary cuts, it is eligible to apply for subsidies under Kurzarbeit — the German government’s short-term work program. Used by numerous organizations during the 2008-2009 recession, Kurzarbeit allows companies to preserve jobs by reducing employees’ working hours during those times that plant usage is low, as the government partly compensates workers for their lost wages.
However, General Motors’ Opel is not alone in its troubles in Europe, as Ford announced earlier in 2012 that its European operations will likely lose more than a billion euros in 2012. The Blue Oval decreased production at its Cologne plant in Germany in May and June, a move that affected 4,000 workers.
The GM Authority Take
This short-term reactionary measure that will allow GM/Opel to decrease its cash hemorrhaging situation; but The General still has major structural problems (in unused/underused factories) to worry about — Europe’s indebted economic situation and declining demand for vehicles notwithstanding.
As such, the automaker still needs to confront high fixed costs and excess production capacity — as closing two plants and an office for a few days isn’t going to help in the long run. But at least GM has a business plan for Opel it’s working to execute as we speak alliance with PSA seems to be on track… right?