Unions support Opel CEO in turnaround plan

Project Olympia
  • Cut production capacity by 15%
  • Cut jobs
  • Restore the Opel brand
  • Launch 150 million euro ($136 million) ad campaign
  • Build more innovative, niche vehicles
  • Create a faster build-to-order production system
  • Bring in suppliers earlier
  • Outsource noncore tasks

  • RUSSELSHEIM, Germany - Adam Opel AG's "Project Olympia" turnaround plan could be the first major restructuring the General Motors subsidiary has undertaken that won't be undermined by union resistance.

    German union leaders say Chairman Carl-Peter Forster has so changed the chemistry at Opel since he took over April 1 that workers feel they can trust management again.

    "I'm convinced that this time we have a chance to solve the (overcapacity) problem with negotiations," said Thomas Klebe, deputy director of IG Metall, the German metalworkers' union, and deputy chairman of Opel's supervisory board. "Hopefully we won't need further action."

    Forster, the Opel board and GM Europe management "have created an atmosphere which should make it possible to come to a peaceful settlement," Klebe said. "There's a huge difference how things are handled now."

    The Olympia plan calls for cutting Opel's capacity by about 15 percent, or about 350,000 units, without closing any plants.

    Forster is a German who was trained at BMW - a company noted for good labor relations - and his appointment has gone a long way toward restoring Opel management's credibility with union leaders.

    So has a willingness by Opel to slash capacity by 15 percent without closing one of its factories.

    "He believes in consulting employee representatives before taking action, and that restores the mutual trust lost in times of terrible labor relations," said Klaus Franz, who is chairman of the European GM Employees' Forum, chairman of the Opel workers' council and a member of the Opel supervisory board.

    Said Klebe: "The CEO's attitude is crucial to the whole atmosphere."

    Forster open-minded

    Klebe described Forster as open-minded and a good listener. While that has helped create a relaxed atmosphere for negotiations, Forster stays focused on his objectives, Klebe said.

    "It's in our interest also to reach those targets and turn Opel around quickly," he said.

    GM Europe and Opel employees have a long history of putting management under pressure with strikes and other so-called spontaneous actions. The latest action, called to protest the closure of GM's Luton, England, plant, shut all of the automaker's European factories for four hours on Jan. 25.

    In June 2000, workers at Opel's Bochum, Germany, plant walked out to protest the way GM's equity swap and joint venture agreement with Fiat Auto was communicated to the work force. Managers and hourly workers learned of the deal on news broadcasts.

    The atmosphere between management and the unions was poisoned over the years by cultural and language differences between German Opel employees - who make up the bulk of GM's European operations - and GM's American career executives, often new to Europe and unable to speak German.

    The Americans often tripped over fundamental differences in labor law between North America and Europe, such as the requirement that union leaders be given seats on the supervisory board. Suggestions from German employees often were taken as criticism of management.

    As Opel's strong market share and profitability faded, the sense of confrontation deepened.

    "We (employee representatives) were compromised all the way along," Franz said. "For years, we were not consulted, and our suggestions went unheard."

    The two sides sometimes clashed on what actions were best for the company. The union officials started linking these issues with others for which Opel needed union consent.

    "It resulted in power playing on both sides," Franz said. "We had to get deeply involved in management decisions to secure the company's independent survival and the brand's integrity, and the American management didn't like that."

    Labor tension eases

    The situation has changed dramatically, the union leaders agree. Opel and GM Europe face the deepest restructuring in a decade, but Forster won the support of the unions for Project Olympia.

    "Forster takes his responsibility very seriously. He is very obliging, and he stands by his words," Franz said.

    The Opel CEO is accessible to union leaders any time, and even on weekends they call him on his mobile phone.

    "This was never the case before," Franz said.

    "Olympia incorporates what the employee side had been demanding in the (supervisory boardroom) for years," Franz said. "For the first time, the problems will be tackled in a comprehensive, holistic way."

    Despite the union enthusiasm over Forster, the spirit of cooperation will be tested when job losses and other cutbacks are imposed.

    Said Franz: "Project Olympia will show how serious both sides take their intention to cooperate."

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