French automaker PSA Groupe is under immense pressure to turn Opel into a winning operation. As the brand’s turnaround sets off, management and staff representatives have struck a new deal to cut workers’ hours at Opel, Reuters reported on Friday.
Opel workers will see a 35-hour work week for workers who currently have agreements in place to work more, the brand said. It’s unclear how many workers the new agreement will affect, but Opel employs over 37,000 people. PSA has long signaled that the costs associated with Opel were much higher than the automaker’s other brands. Production costs were over 50 percent higher than at its French factories.
The cost-cutting measure comes amid PSA’s displeasure with General Motors over the brand’s sale. PSA alleged that GM skewed Opel’s emission issues during purchase discussions. Now, PSA is left with Opel in bad shape as new European Union regulations loom. PSA seeks a refund from GM for about half of the initial purchase price, though it hasn’t taken legal action yet.
The new agreement for shorter hours will also include an expanded part-time program for older employees and the potential for early retirements.