GM Europe changes stall pay talks at Opel

Ruesselsheim, Germany. Wide-reaching changes in GM Europe's structure have stalled negotiations for a new pay agreement at Opel's plants in Germany.

Opel's management is demanding that the employees agree a 10 percent cost reduction in the wage bill within the next five years.

Opel's board of directors wants to achieve the reduction without lowering wages. It is demanding that working hours be increased without extra pay and more flexibility over working hours.

Carl-Peter Forster, new GM Europe president, said: "The works council (a body that represents workers) has made us an offer which includes producing the Zafira successor in Ruesselsheim. We are thinking about it."

General Motors Europe hopes to return to profit through the reorganization measures under which the brands of Opel, Saab and Vauxhall will lose a major part of their independence.

Operations such as finance, engineering, design, purchasing, production, sales and marketing will be controlled from GM Europe headquarters in Zurich.

Opel boss Forster's promotion to GME president is part of the shakeup. He will report to Fritz Henderson, GM Europe's chairman.

Opel's head of engineering, Hans Demant, is taking over the Opel leadership. Demant together with Saab boss Peter Augustsson and Vauxhall boss Kevin Wale, will report to Forster.

GM Europe was hoping to make a profit of up to 100 million euros in 2004. But recently GM's financial director John Devine announced further losses.

No redundancies and no plant closures are planned as part of the current restructuring. "But I cannot guarantee that indefinitely," Forster said.

There will be more joint production in the various GM Europe factories. The details are still being discussed, but one thing is definite - Vectra production will move from Ellesmere Port in England to Ruesselsheim in Germany.

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