The Kaiserslautern plant, which is known as K-town internally, manufactures compression moldings, plastic components, body shell components, sheet metal, aluminum components and axles.
Kaiserslautern supplies all of the Opel factories in Europe plus the Zafira assembly plant in Thailand.
Opel boss Carl-Peter Forster's original plan was to sell the plant. However, negotiations with potential buyers Magna and ThyssenKrupp failed in 2003.
Current plans show that the plant will be turned into a legally independent subsidiary.
Supplying GM will remain the plant's main task. But plant manager Wilfried-J. Ehrlich also wants to be able to use free capacities for third parties.
Ehrlich said that the plant needs "more freedom and flexibility" to be able to enter new business sectors.
Ehrlich wants additional production contracts plus investments of up to 50 million euros within the next two years from General Motors, which owns Opel.
"I believe we have a future not only as suppliers for Opel and the General Motors group but for the whole automobile industry," Ehrlich told Automobilwoche.
"I expect a decision over our future in no less than four to five weeks, once the collective wage negotiations at Opel are finalized," Ehrlich said.
"We might be able to act as a limited company starting in January 2005."
Sources say that the plant received its first large non-GM contract in May. It will supply 52 sheet metal and chassis components for the production of a planned Fiat model, code-named Large, starting in the middle of next year.
Ehrlich confirmed the deal, but did not disclose any details.
Ehrlich and Kaiserslautern works council head Alfred Klingel believe that the plant's future includes the producing of components plus the making of tools and appliances. They also plan to enter totally new business sectors such building fuel cell systems.
The plant is already manufacturing the prototypes for GM's design engineering center, the Global Alternative Propulsion Center (GAP).
Kaiserslautern still has some disadvantages. Its labor costs are 20 percent higher than the average charged by German suppliers. Works council head Klingel is prepared to make adjustments.
"We plan to manage 10 percent within the next five to six years through wage cuts," he said. "The remainder will be saved through restructuring internal work processes."
To improve the plant's competitiveness the works council agreed to a few cost-saving measures with Opel's head of personnel Norbert Kuepper. These include: no extra allowance when working through breaks; smooth shift changes; and machines will be operating 138 hours a week, with Saturday being a regular working day.
More flexible working hours
The plant's rigid working hours are another handicap. Plant manager Ehrlich said it would be helpful if the plant could act independently from the group when it comes to work hours. Works council boss Klingel backs Ehrlich's view: "Without making concessions, the future of all of the plant's jobs will be at risk."
K-town currently employs 2,800 people. Ehrlich said 200 of those workers will go into early retirement this year. He said that a further reduction in staff is not planned.