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Germany takes latest hit in auto industry crisis

by Mathieu Debroux

(Frank Augstein)

 

German car manufacturer Opel, owned by US auto giant General Motors (GM), has announced plans to shut down the production of cars at its plant in Bochum, western Germany, in 2016.

Three thousand three hundred direct jobs are on the line, plus nearly 40,000 more at its subcontractors.

With all indications that the German government does not intend to budge, the unions are currently reflecting on the best way forward.

The closure means that disaster once again looms over the European car industry. On this occasion, it is German workers that are set to foot the bill.

No one is deluded by the management’s promise to save jobs once the production of the Zafira model ends in 2016 or to keep and possibly expand the logistics centre at the plant.

For Rainer Einenkel, head of the works council at the site, "the fact that Bochum will no longer be producing cars after 2016 is tantamount to closing down the plant".

Einenkel is now reflecting on what action to take, and warns that the employees at the four Opel sites in Germany will not take the news lying down.

Several months ago, GM had announced plans to close at least two sites in Europe, revealing that Bochum was in the firing line. The motives given could not be clearer: a drastic fall in the European car market and, above all, the huge overcapacity in the auto industry as a whole.

Some observers argue that today’s decisions are the result of years of bad management by GM, such as the decision to block Opel’s access to growing markets like Asia.

The German government has already made it clear that it will not take action to help the manufacturer, despite the site being the region’s largest employer.

In spite of having pushed to save the group from bankruptcy in 2009, German Chancellor Angela Merkel had already refused to support Opel in 2010.

Hopes, however, remain that support will come through at local level. As Einenkel explains, manufacturing operations could be saved by "an initiative being drawn up by the regional state, the local authorities and trade union IG Metall", which would involve shifting production of the Mocca SUV from Korea.

According to the French daily Le Figaro, it is no coincidence that the closures of Opel in Germany and Peugeot-Citroën in France were announced within weeks of each other.

"In February, General Motors and Peugeot-Citroën had announced that they would work together in a number of areas, but would each handle the restructurings separately."

It would now seem that this is not the case. In addition, the works council fears that production sharing may be on the cards, which may see Citroën and Peugeot models being assembled in German plants, such as Russelsheim.

Everything, in any case, points to the fact that the European car industry, which has long placed reproduction before innovation, has no choice but to make a technological leap forward if it wants to survive.

The closure of the Bochum plant is one more on a list that looks set to keep growing for some time to come.

Already in 2010, Opel announced the closure of its plant in Antwerp, Belgium. In 2011, Fiat closed the Termini Imerese site in Italy, the Peugeot-Citroën plant in Aulnay-sous-Bois, France, is due to close in 2014, as is the Ford Genk plant in Belgium.

 

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