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Opel reaches wage concession deal with labor

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Opel reaches wage concession deal with labor

Paul McVeigh

Automotive News Europe -- May 21, 2010 09:46 CET

UPDATED: March 21 15:50 CET

General Motors Co.'s Opel/Vauxhall unit said today it has reached an agreement with employee representatives on annual wage savings of 265 million euros ($329 million).

The deal removes an important obstacle to Opel winning loan guarantees from the German government toward a 3.7 billion revamp that aims to return the money-losing unit to profit in two years.

Opel has asked Germany to guarantee up to 1.3 million euros in loans that the company says it needs while it carries out a turnaround plan. The restructuring will see the loss of 8,300 of GM's 48,000 European workforce, capacity cut by a fifth and the closure of the company's plant in Antwerp, Belgium.

In exchange, the European workforce demanded that parent GM deliver airtight promises for investments in the manufacturing sites.

"This European framework contract and the specific agreements in each country, including Germany, are important steps along the way to a new and successful company,” Opel CEO Nick Reilly said in a statement Friday.

Opel said the agreement includes 265 million euros in wage savings annually across Europe, with nearly 177 million euros coming from Germany.

It also includes the transformation of Opel's corporate statutes so staff can eventually share in company profits.

Opel said the agreement is based on detailed investment and production commitments for an attractive product portfolio as well as on strengthening the international technical development center in Ruesselsheim, Germany, within the global GM product development network.

A timetable for the introduction of new products, including a new small car below the Corsa, is set out in the deal, but Opel did not give any further information.

The framework agreement is being discussed in individual European countries -- Opel also has plants in Belgium, Austria, Poland, Spain and Britain under sister brand Vauxhall -- and is expected to be ratified in the coming days, Opel said.

Labor and management wanted to present an agreement before Tuesday, when the steering committee of the German state rescue fund is due to discuss Opel's request for aid. Berlin had said that Opel needed to agree labor cost savings before a decision could be made.

Reilly told journalists he expected a positive recommendation from the steering committee meeting. A final decision on aid may take until early June, however, he said.

Reuters contributed to this report

Read more: http://www.autonews.com/apps/pbcs.dll/article?AID=/20100521/ANE/305219983/1308#ixzz0oa0R70cM

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Opel workers agree on restructuring

BY JUERGEN BAETZ

ASSOCIATED PRESS

General Motors Co. and the workers at the automaker’s ailing Adam Opel GmbH unit have reached an agreement on a restructuring plan, an official said today.

Details of the memorandum of understanding are to be disclosed at a press conference later Friday in Ruesselsheim, where the company — whose brands include Opel and Vauxhall — is based, the official told the Associated Press. He spoke on condition of anonymity because he was not authorized to discuss the matter before it was officially announced.

Several “complex details” of the company’s comprehensive restructuring plan, still have to be discussed, the person said.

Opel spokesman Ulrich Weber would only confirm that a press conference would be held, featuring Chief Executive Nick Reilly and Klaus Franz, head of the employee council.

German newspaper Frankfurter Rundschau reported that Opel’s workers would accept pay cuts in exchange for a stake in the company. Weber did not comment on the report.

While details of the emerging restructuring plan remained sketchy, GM was still hoping for state aid to turn around its European subsidiaries.

The German news weekly Focus reported that Reilly sent a letter to Economy Minister Rainer Bruederle stressing the need for $1.6 billion in state aid. A ministry spokeswoman confirmed receiving the letter but refused to discuss its content, citing confidentiality.

GM applied for state aid of some euro2.7 billion from European governments in loans and loan guarantees, Reilly said in February. The pending request to the German government is currently being examined, government officials said earlier this week.

Last year, the U.S. automaker abandoned plans to sell Opel to investors and kept it instead. GM has roared back from bankruptcy to a quarterly profit in less than a year, posting a net income of $865 million for the first quarter 2010.

It announced in March that it would triple its funding for the turnaround of Opel and Vauxhall to euro1.9 billion. GM said then that its bigger contribution was in the form of equity and loans and removed the risk of potential liquidity shortfalls during the restructuring of Opel and Vauxhall.

As part of that plan, GM intends to cut thousands of jobs across Europe. Opel and British sister brand Vauxhall employ around 48,000 people in Europe, about half of them in Germany.

link:

http://www.freep.com/article/20100521/BUSINESS0104/100521013/1210/business01/Opel-workers-agree-on-restructuring

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GM cuts deal with Opel workers to help refinancing

Robert Snell / The Detroit News

General Motors Co. said today it has reached a deal with Adam Opel GmbH workers that will slash labor costs by $332.5 million a year, savings that will help restructure the struggling German carmaker.

Under the agreement, which includes unspecified job cuts and a commitment to build a new small car, most of the savings will come from Germany. The agreement is awaiting formal ratification, which is expected in the next few days.

The cost cuts are one part of a broader reorganization that will require funding from GM and loans guaranteed by the government.

The Associated Press says details of the memorandum of understanding are to be disclosed at a press conference today in Ruesselsheim, where the company -- whose brands include Opel and Vauxhall -- is based.

Opel spokesman Ulrich Weber would only confirm that a press conference would be held, with Chief Executive Nick Reilly and Klaus Franz, head of the employee council, slated to attend.

German newspaper Frankfurter Rundschau reported that Opel's workers would accept pay cuts in exchange for a stake in the company. Weber did not comment on the report.

While details of the emerging restructuring plan remain sketchy, GM was still hoping for state aid to turn around its European subsidiaries.

The German news weekly Focus reported that Reilly sent a letter to Economy Minister Rainer Bruederle stressing the need for $1.6 billion in state aid. A ministry spokeswoman confirmed receiving the letter but refused to discuss its content, citing confidentiality.

The pending request to the German government is currently being examined, government officials said earlier this week.

Last year, the U.S. automaker abandoned plans to sell Opel to investors and kept it instead. GM has roared back from bankruptcy to a quarterly profit in less than a year, posting a net income of $865 million for the first quarter 2010.

GM intends to cut thousands of jobs across Europe. Opel and British sister brand Vauxhall employ around 48,000 people in Europe, about half of them in Germany.

From The Detroit News: http://detnews.com/article/20100521/AUTO01/5210402/1148/GM-cuts-deal-with-Opel-workers-to-help-refinancing#ixzz0oaFv9R23

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OPEL ANNOUNCES NEW LABOR DEAL, LAYS GROUNDWORK FOR GOVERNMENT FUNDING

By Drew Johnson

Not all German officials are in support of government aid for General Motors’ Opel brand, but the automaker’s German unit announced on Friday that it has struck a deal with its labor force that will likely pave the way for government funding.

According to GM, the new labor agreement will save the company €265 million annually across Europe, with €176.8 million of that coming from Germany. If any of Opel’s future product plans were to fall through, some of those labor savings – which will be put in escrow — could be returned to Opel employees.

Additionally, Adam Opel GmbH will be transformed into an AG (incorporated company).

“This European framework contract and the specific agreements in each country, including Germany, are important steps along the way to a new and successful company,” says Opel CEO Nick Reilly. “It is gratifying to see that both management and employee representatives can work together and share the common vision of a successful future.”

The deal will see Opel shed about 8,300 workers from its 48,000 European workforce. Opel will also slash its European capacity by about a fifth, including the shuttering of the company’s Antwerp, Belgium plant.

GM is seeking up to €1.3 billion in guaranteed loans from the German government.

link:

http://www.leftlanenews.com/opel-announces-new-labor-deal-lays-groundwork-for-government-funding.html

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Opel wins wage-concession deal, clearing way for German aid

Paul McVeigh

Automotive News -- May 21, 2010 - 3:46 am ET

UPDATED: 5/21/10 10:48 a.m. ET

General Motors Co.'s Opel/Vauxhall unit said today it has reached an agreement with employee representatives on annual wage savings of 265 million euros ($329 million).

The deal removes an important obstacle to Opel winning loan guarantees from the German government toward a 3.7 billion euro revamp that aims to return the money-losing unit to profit in two years.

Opel has asked Germany to guarantee up to 1.3 million euros in loans that the company says it needs while it carries out a turnaround plan. The restructuring will see the loss of 8,300 of GM's 48,000 European work force, capacity cut by a fifth and the closure of the company's plant in Antwerp, Belgium.

In exchange, the European work force demanded that GM deliver airtight promises for investments in the manufacturing sites.

"This European framework contract and the specific agreements in each country, including Germany, are important steps along the way to a new and successful company,” Opel CEO Nick Reilly said in a statement today.

Opel said the agreement includes 265 million euros in wage savings annually across Europe, with nearly 177 million euros coming from Germany.

It also includes the transformation of Opel's corporate statutes so staff can eventually share in company profits.

Opel said the agreement is based on detailed investment and production commitments for an attractive product portfolio as well as on strengthening the international technical development center in Ruesselsheim, Germany, within the global GM product development network.

A timetable for the introduction of new products, including a new small car below the Corsa, is set out in the deal. Opel did not give any further information.

The framework agreement is being discussed in individual European countries -- Opel also has plants in Belgium, Austria, Poland, Spain and Britain under sister brand Vauxhall -- and is expected to be ratified in the coming days, Opel said.

Labor and management wanted to present an agreement before Tuesday, when the steering committee of the German state rescue fund is due to discuss Opel's request for aid. Berlin had said that Opel needed to agree labor cost savings before a decision could be made.

Reilly told journalists he expected a positive recommendation from the steering committee meeting. A final decision on aid may take until early June, however, he said.

Reuters contributed to this report

Read more: http://www.autonews.com/apps/pbcs.dll/article?AID=/20100521/COPY01/305219965/1308#ixzz0obZvNLQ5

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GM, Opel workers agree on concessions

Move cuts labor cost $332.5M in German firm's restructuring

Robert Snell and Christine Tierney / The Detroit News

General Motors Co. reached an agreement with workers at Adam Opel GmbH that will slash labor costs by $332.5 million as part of an effort to restructure the struggling German carmaker.

Under the terms of the agreement, which includes unspecified job cuts and concessions, most of the savings will come out of Opel's operations in Germany. The deal also includes a pledge to produce a small Opel car.

The agreement is a crucial step in GM's effort to line up financing for a $5 billion restructuring for the Rüsselsheim-based carmaker.

GM has agreed to pay half of the restructuring bill but is seeking loan guarantees from the governments in countries where Opel has operations for the rest.

Under the deal, workers agreed to give up a one-time bonus and accept reduced vacation and Christmas bonuses. They also agreed to the postponement of a previously negotiated 2.7 percent salary hike.

"The negotiations were not easy," Opel Chief Executive Nick Reilly said. "The company was damaged by the global crisis and has to restructure to recognize a lower industry.

"On the other hand, we need to keep innovating in new technologies and products to maintain Opel-Vauxhall as a leading European automotive company that can compete worldwide."

Reilly was dispatched last year to run GM's European operations after Chairman Ed Whitacre Jr. scrapped a previous German-backed deal to sell Opel to a consortium led by Canadian parts maker Magna International Inc.

Since then, some members of Germany's government have opposed granting aid to the subsidiary of a now profitable GM.

GM has roared back from bankruptcy, posting an $865 million profit for the first quarter of 2010.

GM plans to seek bank loans and is asking the German government only for loan guarantees, not grants, said Opel spokesman Stefan Weinmann.

The German government is expected to make a decision in early June. A panel of government, private and academic experts is studying Opel's plan and is expected to issue a recommendation Tuesday.

The German news weekly Focus reported that Reilly wrote to Economy Minister Rainer Bruederle, stressing the need for $1.6 billion in aid. A ministry spokeswoman declined to discuss the letter.

Bruederle does not appear to favor helping Opel, but governments in German states where it has plants want to help.

Andreas Falke, a professor of economics and social sciences at the University of Erlangen-Nürnberg, said the uproar over the bailout for Greece was unlikely to have any effect on the debate over the much smaller amount of help Opel is seeking.

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From The Detroit News: http://detnews.com/article/20100522/AUTO01/5220325/1148/GM--Opel-workers-agree-on-concessions#ixzz0oqqLW2VI

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Report: GM, Opel agree to restructuring, clearing the way for German loans

by Jonathon Ramsey (RSS feed) on May 24th 2010 at 9:31AM

To the German government authorities who think General Motors is financially sound enough to pay for Opel's restructuring without loan-guarantee assistance, Opel CEO Nick Reilly says that's not the case. "You need to remember that GM is first of all founded by U.S. taxpayers," Reilly was quoted as saying. "Frankly, GM needs the money it has got."

Not surprisingly, GM has found an ally in Opel's German workers. The General has come to an agreement with the local labor heads who have agreed to forgo €1.26 billion ($1.586B U.S.) in earnings over the next four years. The deal requires that the money 'saved' be committed to developing Opel products, and if it isn't, then GM has to pay it back.

To help everyone keep track of the money and perhaps make financial assistance a more attractive option, Adam Opel AG will become a listed company. Germany hasn't given any indication of when it will declare its position on giving aid, but with 24,000 workers added to the plea and everyone unsure of how long GM can wait before it needs to take other measures, Germany will probably want to close this chapter out rather soon.

link:

http://www.autoblog.com/2010/05/24/report-gm-opel-agree-to-restructuring-clearing-the-way-for-ge/

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