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  • William Maley
    William Maley

    Opel To Halt Production At Two Plants

    William Maley

    Staff Writer - CheersandGears.com

    August 24, 2012

    General Motors will be closing down two Opel plants for a total of four weeks in response to a drop in demand for cars in Europe.

    A report from Reuters says an agreement between Opel and labor representatives will have two plants, Ruesselsheim and a component plant in Kaiserslautern, to halt production for a total of 20 working days between September and the end of the year.

    “The European automobile market is declining dramatically. Now, shortened working hours are the correct measure to bridge the weakness of the market,” said Opel's head of personnel, Holger Kimmes.

    The decision to halt production is a “Kurzarbeit” (German for “short work”). Kurzarbeit is a temporary measure that allows companies to shorten hours to deal with ininsufficient demand. Workers can be sent home without or with reduced pay, and will get unemployment benefits of up to 67% of their normal pay.

    9,300 blue and white collar workers at Opel are affected.

    However, analysts said that closing down plants won't help at all.

    "Closing down plants for a few days isn't going to help Opel with its most pressing problem of overcapacity," said Frankfurt-based Commerzbank analyst Sascha Gommel.

    Source: Reuters, The Truth About Cars

    William Maley is a staff writer for Cheers & Gears. He can be reached at [email protected] or you can follow him on twitter at @realmudmonster.

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    What does GM and the European Union not get about over production?

    Two weeks shutdown will not correct the glut of assembly space and the lack of customers.

    They need to close down at least 2 assembly lines and lay off the workers.

    I would hate to loose my job also, but then do you have a whole division close and everyone looses their jobs or do you cut back to what is sustainable?

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    Dfelt, I could not agree more. I would go one step further. Close all Opel plants for at least one year, then open those that are economically viable. This will require breaking the overpampered unions in Europe. Other carmakers in Europe should do the exact same thing. (BMW and VW don't need to for obvious reasons.) Times have changed and European unions must adapt to the new economic reality imposed by bad economies and worse banks and the Euro.

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    Times have changed and European unions must adapt to the new economic reality imposed by bad economies and worse banks and the Euro.

    Unions have Merkel's backing. By putting them off on a reduced rate, unions go on unemployment for remainder of their salary. What it will do is put strain on Germany's social coffers. In long term let us see how that will work.

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