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GM's Opel Plan Expected To Cut 9,500 Jobs

Tue, 11/24/2009 - 12:35pm
Erich Reimann, Associated Press Writer

DUESSELDORF, Germany (AP) -- General Motors Co. will present to unions on Wednesday the restructuring plan for its Opel unit, with up to 9,500 jobs expected to be cut, the carmaker's top official in Europe said Tuesday.

Nick Reilly said the company would first inform "our people and our union colleagues" about the plan, and did not specify when GM would go public with details, saying only that they "will be released relatively shortly."

The number of layoffs is slightly less than GM's earlier estimate that between 9,000 and 10,000 jobs will be cut across Europe.

Opel's Bochum plant in northwestern Germany will remain open, Reilly indicated, saying: "Bochum remains an important part of the resources of General Motors in Europe going forward."

Reilly spoke after meeting the governor of North Rhine-Westphalia state, Juergen Ruettgers, who is a deputy leader of German Chancellor Angela Merkel's party.

Ruettgers, who faces a state election next May, has pressed for the Bochum plant's future to be assured.

After a meeting later Tuesday with the governor of Rhineland-Palatinate state, Reilly said a plant at Kaiserslautern, in southwestern Germany, also would have a role to play within GM in future -- though he indicated voluntary job cuts would be needed.

Reilly, who took over responsibility for Opel and sister brand Vauxhall earlier this month, declined to comment on the future of other sites, but confirmed that cuts will be needed.

"To enable Opel and Vauxhall to have a long-term sustainable future, we do have to go through a restructuring plan, and that means taking out approximately 20 percent of capacity, and approximately 9,000 to 9,500 people," he said.

GM shocked Germany and other European countries earlier this month by abruptly canceling the planned sale of a majority in Opel to a consortium of Canadian auto parts maker Magna International Inc. and Russian lender Sberbank.

German officials then demanded that GM repay by Nov. 30 a euro1.5 billion ($2.2 billion) bridge loan that it granted earlier this year to keep Opel afloat as a buyer was sought -- and GM officials said they were doing so.

Merkel said during a speech in Berlin that the company completed the repayment on Tuesday.

Opel employs around 45,000 people in Europe, about 25,000 of them in Germany.

On Monday, GM asked European governments to help pay most of the euro3.3 billion ($4.9 billion) it needs to restructure its European operations.

At talks in Brussels, EU nations where GM has plants vowed to avoid individual negotiations with the company before a Dec. 4 meeting at which they will coordinate their response to GM's restructuring plans.

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