Opel says to cease car production at Bochum plant in 2016

Opel, the loss-making German arm of US auto giant General Motors, said on Monday it would halt auto production at its Bochum plant in 2016 but pledged to keep it running as a parts distribution centre.

“Opel management has today informed the workforce that full vehicle production at the Bochum plant will be discontinued after production of the Zafira model is scheduled to cease in 2016,” the statement said.

Opel had already announced in June that it would stop building Zafira cars in Bochum in 2016.

“The main reasons behind this decision are the dramatic decline in the European car market and the enormous overcapacity in the entire industry,” Opel explained.

Despite “intensive efforts, we have been unable to change this situation.” On Friday, the works committee had said the decision could mean the entire site might be shut down with the potential loss of up to 3,000 jobs.

But management insisted that would not be the case and that although vehicle production would cease, Bochum would be used as a parts distribution centre after that date.

Indeed, in its new function, the plant could even be expanded as part of an initiative to secure existing jobs at Bochum and even create new ones.

“It is our clear intention to safeguard the jobs of a significant number of Opel employees in Bochum, said head of GM Europe Steve Girsky.

“Germany is our most important market and, with around 20,000 employees, the backbone and home of our brand. That will remain true in the future,” said Opel deputy chief Thomas Sedran.

According to the German news agency DPA, “several hundreds” of jobs would be created in the new parts distribution centre, but a company spokesman declined to confirm the figure. “Everything is still being negotiated,” he told AFP.

GM estimates it stands to lose more than $1.5 billion (1.2 billion euros) on its European operations this year and wants to steer Opel and its British sister brand Vauxhall back to profit by 2015. Opel and Vauxhall are heavily dependent on the European market where industry-wide sales fell by 15 percent in the first nine months, according to data published by the European autombile makers’ association. The German government expressed “great regret” at Opel’s decision to cease vehicle production at Bochum.

“That’s a terrible blow for the people affected and their families, as well as for Bochum as an industrial site,” said government spokesman Georg Streiter.

“The government regards Opel as a key company in the German automobile sector and expects the parent company General Motors to undertake everything to reach a solution that is socially acceptable,” Streiter told a regular news briefing in Berlin.

He said the government welcomed Opel’s intention to retain and expand Bochum into a logistics centre.

AFP