Embattled automaker Opel, a General Motors subsidiary, said Monday it would shutter a half-century-old plant in Germany's industrial heartland in 2016.
The move threatens 3,000 jobs in the Bochum plant which makes the Astra compact and Zafira people-carrier. The announcement of the closure at a staff meeting sparked an ugly scuffle.
The plant closure is "a serious blow to those affected, their families and the industrial base of Bochum," said government spokesman Georg Streiter in Berlin.
Adam Opel AG's interim chief Thomas Sedran said "we are suffering from huge overcapacity and a dramatic fall in demand in Europe."
"After considering various factors, Bochum unfortunately proved the least economical plant," he told dpa. "At the end of the day we need to find the best solution for all our plants and employees."
He said 430 staff would stay on beyond 2016 in logistics and distribution centres in Bochum, and that more jobs may be created there and in a components plant under discussion.
While the government voiced its deep regret, Economy Minister Philipp Roesler said it would not step in to save the plant in the industrial Ruhr region of the state of North Rhine-Westphalia.
"It is not the duty of the state to give financial aid to the company and temporarily bail it out," said Roesler, who is also vice chancellor to Angela Merkel.
The announcement did not come as a surprise after struggling Opel said in June it would not produce a follow-up model to the Zafira seven-seater, which would be due in 2017, in Bochum.
Auto giants have hit tough times in Europe, shutting plants at the cost of thousands of jobs.
Ford recently announced plant closures in Belgium and Britain, Peugeot has said it would shutter a car factory near Paris, and Fiat said last week it would cut production at a Polish plant.
Sedran said Opel, whose cars are sold under the Vauxhall brand in Britain, aims to return to profit by mid-decade but voiced dismay at the current business climate in Europe.
"When I look at the state of public budgets in eurozone countries and the burden of the consolidation steps on citizens, then I don't expect things to change soon," he said.
"We can keep dreaming of great markets. We have to face reality. We, the board, have realised things won't get better if we keep going like we have for the past 10 years ... Profits are the way to a secure future."
The announcement to staff was marred by an ugly incident when a stewart of the IG Metall union approached Sedran as he left through a back entrance, said work council chief Rainer Einenkel.
Security staff pushed the union man to the ground and gripped his throat, said Einenkel who called the incident "degrading." He added that the metal workers union man was not injured and the rest of the meeting was peaceful.
The Opel plant in Bochum at its peak employed 20,000 workers, but their numbers have fallen to 3,200 now, with about 1,000 people working for regional partners and suppliers.
Founded 150 years ago, GM's Opel employs more than 37,000 workers in Europe, including over 20,000 at four plants in Germany and others in Britain, Spain, Italy, Austria, Poland and Hungary.
Hispanic #1 Breaking News for Entrepreneurs, Professionals and Small Business Owners - HispanicBusiness.com
OCTOBER 31, 2014
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