Opel to close German plant in 2016, fears continued Euro slump

Mon, 10 Dec 2012

The European financial crisis has claimed another victim, as Opel has stated that it is going to close its Bochum, Germany facility. The closure is set to occur in 2016, when the current Opel Zafira minivan ends its production run. According to Automotive News Europe, parent company General Motors is looking to minimize the impact to the 3,300-strong workforce by adapting the plant to focus on component and distribution efforts.

According to the report, GM believes the economy in Europe will not recover until 2014, and that this move was unavoidable. GM expects losses of between $1.5 billion to $1.8 billion from its Opel and Vauxhall brands in Europe. To try and stem the hemorrhaging, Opel is forced to lay off 2,600 employees, resulting in a $300 million spending cut. Another $500 million in cost cutting is excepted between from to 2013, through 2015 as part of a plan called Drive Opel 2022. The decade-long plan is rooted in cost-cutting, reorganization, and re-focusing products and marketing. As part of this plan, Opel will launch 23 new models between now and 2016.

Still, the plant closure comes as a blow to many Opel employees, and the labor union has hopes to save the Bochum facility. Unions, as well as the German Government, expect General Motors to compensate those who lose their jobs in this closure with appropriate severance packages. GM Europe stated that it is trying to move component production to the Ruhr Valley region, where the Bochum factory is located. It will be able to save some jobs through this effort, though certainly not all 3,300.

By George Kennedy