Opel is ready to spin off Kaiserslautern parts plant

Kaiserslautern, Germany. Opel is preparing to spin off its Kaiserslautern components plant.

"It is of course our aim to run Kaiserslautern with only one external partner. However, we are also examining the splitting up of the plant into a plastics, a pressing plant and an axle limited liability company," says Opel chairman Hans Demant.

Opel officials say that some weeks ago Opel wrote to 30 suppliers and invited them to join negotiations.

Large suppliers from China, South Korea and the U.S. have shown interest. Many have inspected the plant.

Kaiserslautern manufactures presswork, plastic, bodywork, sheet metal and aluminum components and axles.

Opel plans to spin off the plant by 2006 at the latest. But the automaker will first invest up to 100 million euros to upgrade the manufacturing facilities and make the plant more attractive for investors.

Klaus Franz, head of Opel's works council, says the plant will remain busy until 2014, as it fills orders for the Corsa and Vectra successors.

Alfred Klingel, head of the Kaiserslautern works council, said at least 1,100 of the 2,500 jobs are secured until 2008 due to several contracts.

General Motors will remain the plant's largest customer. But once the plant has been spun off it also will be able to supply third parties.

Opel tried to sell the plant three years ago as part of the Olympia restructuring program. But negotiations with Magna and ThyssenKrupp failed due to the wage costs that were 20 percent above standard rate.

The situation has changed since then. In March unions and management signed an agreement that will cut wages by about 6.5 percent, increase productivity and introduce more flexible working practices.