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COMMENT: Opel employees should listen to reason rather than follow their emotions

A strike would have incalculable consequences

COMMENT
Franz W. Rother is Editor-in-Chief of Automobilwoche

Trade unionists at GM Europe's Opel subsidiary are preparing for a fight.

Klaus Franz, chairman of Opel's general works council, has threatened to cease talks with GM Europe unless he gets assurances that there will be no compulsory layoffs at Opel.

IG Metall leaders at Opel's Bochum factory have threatened to call new protests over GM Europe's plans to cut up to 12,000 jobs to save half a billion euros by 2006 -- as if the October strikes at Opel have not caused enough damage.

IG Metall can't pay for a long strike. And most Opel employees probably do not believe a strike will stop GM Europe from pushing through the planned job cuts.

Sooner or later 12,000 workers will lose their jobs at GM Europe and 10,000 of those jobs will be cut at Opel in Germany.

Some workers will receive severance pay or will take early retirement. Most will be offered two-year retraining courses.

Other ways to stop GM Europe's losses have been discussed for years. But the introduction of a 30-hour week and the Olympia cost-cutting program didn't put Opel back on the road to profitability.

The company suffers from management mistakes made during the 1980s and '90s, and from high labor costs.

Only successful brands such as BMW or Porsche can afford to pay workers wages that are significantly above the German metal industry average. And they can only do that for as long as sales go well and customers worldwide are prepared to pay high prices for prestigious cars.

Despite the success of the new Astra and the Meriva, Opel is far from being able to afford high labor costs.

The brand's image is improving, but pressure is increasing from the competition.

South Korean automakers such as Hyundai and Kia build cars that are almost as good as Opel's but are a lot cheaper.

To rescue what can be rescued, General Motors has decided to take drastic measures.

After the restructuring, Opel will be just another GM brand with Vauxhall, Saab and Chevrolet.

Production, product engineering and sales for all of GM's brands in Europe will be controlled centrally.

Opel will be turned into a limited company according to German law.

Ford-Werke in Cologne became a limited company November 29.

Ford's German works council supported this decision because co-determination rights that German workers enjoy under the country's labor laws are fully maintained.

Let's hope that Opel employees will listen to reason rather than follow their emotions.

A strike would have incalculable consequences.

GM chiefs in Detroit could still decide to close Opel plants in Germany and move production to Poland.

Opel employees would be better to make the best of a difficult situation, in the hope that a turnaround can be achieved next year.

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