General Motors has secured a deal with German labor groups to implement shortened work days for more than 9,000 employees in Europe.
GM's Opel unit announced today that it had reached a deal with German labor union IG Metall and the influential Works Council to impose 20 "short work days" for vehicle assembly and administrative operations in Rüsselsheim, Germany, as well as a parts plant in Kaiserslautern.
The German government is expected to provide some funding to workers to help offset the pay reduction workers will experience under the deal, although GM did not disclose how much the government would contribute.
At the automaker's facilities in Rüsselsheim, the deal affects 3,500 manufacturing workers and 3,300 central and administrative employees. It doesn't affect the 7,000 people in the engineering department. At the Kaiserslautern plant, it affects 2,500 employees.
The deal reflects a short-term concession for GM, which is negotiating a long-term cost-cutting deal with its European labor groups.
"The European car market is declining substantially," said Holger Kimmes, member of the Opel management board and vice president of Opel/Vauxhall personnel, in a statement. "Until recently, the decreased production schedules could be compensated by applying corridor shifts and accrued overtime. Now short work is the right bridging measure."
The shortened shifts for manufacturing workers will start in September, while the short days for administrative and service employees will start in October, GM said.
Opel Works Council head Wolfgang Schäfer-Klug said the measure would "safeguard jobs."
The deal comes a few weeks after GM Vice Chairman Stephen Girsky took over as interim president of GM's European operations. He's responsible for identifying a viable business plan for the unit, which has lost an average of more than $1 billion a year for the last 12 years.
GM lost $617 million in Europe in the first six months of 2012, compared to a $107 million profit a year earlier.
