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Hot Christmas at Opel

Tough negotiations over outsourcing and downsizing continue

Ruesselsheim, Germany. Restructuring talks at Opel are getting tougher.

"We have to finalize the negotiations over new joint ventures and the new future contract by the beginning of 2005 at the latest" said Klaus Franz, the head of the works council. "We need peace again within our work force."

The two sides are working out the conditions under which employees will switch to joint ventures or spinoff companies. "The works council can't accept that any social security should be revoked after a year. We will not say yes to this out-and-gone method that management would like to use," Franz said in an interview.

He said wages at Opel that are between 15 percent and 20 percent higher than the standard rate "will definitely not be completely cut," and he called claims to the contrary "speculations or deliberately false reports."

"We will not make concessions regarding wages if we do not get any concessions in regard to guaranteed locations," Franz said. Beside a guarantee that the Vectra and Saab 9-3 successors will be built in Ruesselsheim starting in 2008, Franz said he also wants a guarantee that the next generation Astra will be developed in Russelsheim. He also wants a location guarantee for the Bochum plant that goes "beyond the year 2010."

The works council believes that Opel's Kaiserslautern plant should be turned into a GmbH, a limited liability company, as soon as possible. "That way it can acquire contracts from third parties and improve its productivity," Franz said.

Part of the Ruesselsheim plant also should be outsourced. Insiders said that there are prospective purchasers for logistics areas like the components warehouse and the vehicle dispatching department. The tool engineering department, which has 600 employees, also could be outsourced, insiders said.

A total of 9,800 employees will leave Opel's payroll by the end of 2005. GM hopes that 3,000 workers will leave through outsourcing or will go into early retirement. The others will receive severance pay or will be moved to newly-created "transfer companies."

In Kaiserslautern, 400 jobs will be cut, in Bochum 3,600 and at Fiat-GM Powertrain, 500. About 5,000 jobs will be cut at the Ruesselsheim plant, 2,200 of which are in production, 1,500 are in product development and 1,300 are in the components warehouse and administration.

"These are flexible goals," an Opel spokesman said. "It is the total number that is crucial to us

The severance pay (before tax) for employees is calculated by using the following formula: Age multiplied by period of employment multiplied by gross income divided by 25. Should there not be enough volunteers for the "transfer companies," an arbitration board will be formed.

Franz said there will be no automatic compulsory layoffs.

How many employees will volunteer to leave will become clear between January 10 and January 31. "At the moment we have a few hundred provisional agreements," said Franz. Staff reductions, he said, will cost about $1 billion.

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