PSA Excludes German Sites From European Investment Plan, Labor Leaders Fear Job Cuts
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PSA Groupe has been on a mission to cut costs at its newly acquired Opel and Vauxhall brands. The French automaker purchased the brands from General Motors, along with GM’s manufacturing facilities, last year for $2.6 billion. Labor leaders are now fearing the automaker is targeting mass job cuts in Germany in the pursuit of profitability.
Reuters reported on Thursday that PSA has excluded Germany from its European investment plan as Opel management seeks concessions to raise plant profitability. At the Eisenach plant, labor leaders fear PSA could cut half of the workforce.
“The current offer is for one vehicle to be produced in Eisenach which means that between 700 and 1,000 jobs will be cut back,” Wolfgang Schaefer-Klug, head of Opel’s works council, told the publication.
Labor leaders also said concessions are unthinkable as they would nullify an agreement to honor an existing collective wage bargaining agreement. Opel CEO Michael Lohscheller said management has presented an offer that’s better than the current agreement, but the goal is to keep the Opel plants competitive with existing PSA facilities.
“In part, our factories were twice as expensive as PSA factories,” he said.
Most recently, Opel announced a company-wide buyout program for all employees. Every single department will have the opportunity to take a voluntary buyout in an effort to shrink the workforce.
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First, one has to consider that a majority of the 19,000 Opel employees in Germany are White Collar workers: engineers and so in the technical development and design center and in business administration. These roughly 10,000 of the 19,000 are concentrated in Rüsselsheim — the factory floor is north of the railway, the others south of it.
Second, PSA demanded to cancel the 4.3% wage hike agreed in the collective bargaining contract which covers the metal processing and electric industries in Germany, including the three Opel sites. The trade union and works council had rejected this, and apparently the company has ceded and will pay out the agreed to raised wages at the end of this month.
Third, according to Wolfgang Schäfer-Klug, the president of the Opel works council, PSA has shown them a plan to reduced the head count in Germany by 3’700 people, and a large part of that in the technical development center. This former GM’s second largest development center still has work on several GM development contracts up to 2020.
According to Schäfer-Klug, already 2’000 have signed up for the voluntary departure programs mentioned in the article above, and Schäfer-Klug fears that Opel might lose more people than PSA originally had planned, and will actually lack personnel both in development and in the three factories (BTW, a group in the Rüsselsheim development center is to lead the development for a special LCV platform and vehicles based on this from initial design to production).
I myself see also problems brewing for Opel from the crisis of GM Korea. IN 2017, GM Korea has produced two thirds of the overall Mokka and Mokka X (twin of the Buick Encore), and all of the Opel Karl or Vauxhall Viva, the Opel version of the Chevrolet Spark.
GM must have maintained one of the world’s largest engineering teams in the industry. I can’t see Ford or FCA supporting such a staff.
It seems as if Opel, a small brand, was responsible for a large degree of GM engineering work yet recieved minimal licencing fees. Product like Epsilon platform, Buick Regal, and Astra are obvious but even SAIC Rowe brand is using an Opel derived product.
Considering the shell game played by GM it’s no wonder that Opel lost money.
Observer, if possible, tell me more about this LUV platform?
Well, the salaries of the people working in the Rüsselsheim ITDC (International Technical Development Center) were paid…
What can anybody tell about this LCV platform? It is to be developed. Maybe they already have some ideas. What I know is this 2018-04-04 press release: “LCV Development Responsibility for Groupe PSA to be based in Ruesselsheim” ( http://media.opel.com/media/intl/en/opel/home.detail.html/content/Pages/news/intl/en/2018/opel/04-04-lcv-development.html ), which says
Both the small LCVs (Opel/Vauxhall Combo [2018], Citroën Berlingo, Peugeot Partner) and the mid-size LCVs (Opel/Vauxhall Vivaro [2019], Peugeot Expert) are unibody constructions, based on PSA’s EMP2 passenger car platform. (Combo: while the current one is badge engineered from Fiat Doblò, the new one is product of a 2012 agreed upon common development of GM-Opel with PSA on the PSA platform, the current Vivaro is a common product with Renault Trafic, but will switch in 2019 to a badge engineered version of the Peugeot-Citroën’s)
In the largest segment, the current Opel/Vauxhall Movano is also a co-product with Renault, built in Renault’s SOVAB factory in Eastern France, and the Peugeot Boxer/Citroën Jumper (Relay in UK) are co-produced with FCAs Fiat Ducato (RAM ProMaster) in the 50:50 joint venture SEVEL in Italy. They are body-on-frame constructions.
So my guess is that PSA intends to separate from both Renault and FCA and develop their own body-on-frame construction for at least the larger LCVs.