Opel May Close Two European Factories - Reports

Rumors of factory closings swirl around General Motors Co.'s German subsidy Opel, despite strong sales of its electric Ampera, the European version of the Chevy Volt.

GM is planning to close one or two European factories to cut costs of its Opel/Vauxhall division, the Wall Street Journal reported Thursday.

GM's Opel division produces an excess capacity of 500,000 cars annually, according to Reuters, which quoted an unnamed labor representative from the company as saying, We have two plants too many and the new head of manufacturing has been visiting one site after the other, playing them off against each other.

According to some reports, Opel's management could present a plan to close factories as soon as Wednesday, reports have emerged that the Ampera is exceeding expectations for sales in 2012.

Orders for the 2012 Ampera cruised by the 7,000 unit mark recently, following its naming as the European Car of the Year at the Geneva Motor Show. Opel's 2012 sales goal for the Ampera was just 10,000 units, and the company seems set to exceed that goal easily.

This latest figure even surpasses Opel's most optimistic expectations for this point in time, the company said.

Two Opel plants in particular have been fingered in the secret plant-closing discussions, according to the Journal. Opel plants at Ellesmere Port, Britain, and Bochum, Germany, are both said to be under consideration for closure by GM. The two plants under consideration for closure employ approximately 5,200 workers.

Whether the plants will close, though, is debated. The New York Times reported on Friday that worker representatives from Opel said there was no discussion of closing European plants.

Contradictory statements from the European Employee Forum of Opel/Vauxhall leave the state of negotiations between workers and GM unclear.

Either way, GM's European unit posted losses of $747 million in 2011, and Opel's market share has been shrinking. With Europe in recession, the fate of Opel's factories seems grim.

Opel and GM are rejecting ... talks preferring to use the method of 'divide and rule'. Management continues to play one side against another and to put brutal pressure on the Worker Representation bodies in individual sites. At the same time, Opel/Vauxhall is fighting with a difficult market situation in Europe, as the company still lacks the opportunity to balance sales decreases in Europe by exports to other regions, a March 19 statement by the European Employee Forum of Opel/Vauxhall said.