Cost Of Opel Bochum Closure Grows To $866 Million
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The decision to close Opel’s Bochum factory in Germany was driven by the automaker’s desire to drive costs down as it attempts to return to profitability and strengthen its market share in Europe. However according to a recent Reuters report, the closure of the factory is expected to cost more than the original 500 million euro estimate, raising concerns that shutting the factory down wasn’t worth it in the first place.
General Motors president Dan Amman told Reuters the cost of the Bochum closure will grow to $866 million by the end of this year. Opel, after months of negotiations, reached a severance deal last week with German labor union IG Metall, which represents the plant’s employees.
Ammann said a total charge of $485 million will be undertaken for the plants closure this year. The company booked $381 million of the cost in its financial reports last year. The cost relates to both the vehicle and transmission manufacturing facilities which were at the plant.
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