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GM Opel Turnaround Plan to Be Tested in Bochum Union Vote

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General Motors Co., seeking to stem losses in Europe by its Opel brand, today faces a test of the company’s turnaround as workers at its Bochum, Germany, assembly plant consider a proposal to pare expenses.

The company, which has lost $18 billion in the region since 1999, has agreed to continue production at the Bochum plant through 2016, and keep part of the facility open as a parts and logistics center, saving about 1,200 of the location’s 3,000 jobs. If workers don’t approve the deal, GM has said it will stop production there after next year.

The plan is part of a broader strategy by GM to return to break-even in Europe by mid-decade through cutting costs and increasing revenue with 23 new Opel products by 2016, including the Mokka compact sport-utility vehicle

While three of GM’s German plants have already approved a wider labor agreement that guarantees the jobs of more than 20,000 German workers in exchange for a wage freeze through 2015, Bochum’s union leaders haven’t endorsed it.

Bochum workers will vote on the proposal today, Rainer Einenkel, the plant’s works council leader, said yesterday in a pamphlet. The plant’s labor leaders have criticized the agreement, saying it fails to adequately lay out jobs in the future parts production.

“I frankly don’t know how it’s going to go,” Steve Girsky, GM vice chairman and chairman of Opel supervisory board, said in an interview yesterday at the company’s Detroit headquarters about the vote. “If it fails, it may cost us more in the near-term but it may help us in the intermediate term because car production will end early.”

‘Right Thing’

The company is willing to keep some jobs at the plant because “we want to do the right thing,” he said.

Gearbox assembly in Bochum would also be scaled back to two shifts instead of three, with 700 positions being cut in the move, GM has said. The automaker had previously planned to cease gearbox production entirely in the city at the end of 2013.

Union workers at GM’s Ruesselsheim, Kaiserslautern and Dudenhofen factories voted with majorities exceeding 83 percent to accept the reorganization agreement, the IG Metall union said March 15 in a statement.

(Source: Bloomberg)