Thousands of Opel workers walk off job

German, Russian governments angry after GM changes mind

Nov 05, 2009

THE ASSOCIATED PRESS

BERLIN – Thousands of Opel employees walked off their jobs to attend a rally at the automaker's headquarters Thursday, protesting against General Motors Co.'s decision to abandon the unit's sale to new owners the workers hoped would preserve jobs.

Workers at Opel's German headquarters in Ruesselsheim vented their frustration and anger at GM, which after months of negotiations decided Tuesday to scrap the sale of a majority in Opel to Canadian auto parts maker Magna International Inc. (TSX: MG.A) and Russian lender Sberbank.

"Our trust (in GM) is now zero, and that is the heart of the problem," Klaus Franz, the head of Opel's employee council, told thousands of workers in Ruesselsheim, winning applause.

"We will stand together and fight for our future. We will not be defeated, we are proud, we are Opel," said Franz.

Franz called on GM to come up with a viable plan for the automaker. "We are starting over again from zero," he said.

He argued that Opel should have a more independent status and ``no longer be an appendage of GM.''

Unions and employees had offered cost-cutting concessions to ease a Magna deal, such as forgoing pay increases, that are now off the table.

GM will face a new battle to secure concessions for its own restructuring plan – and has raised the prospect of a bankruptcy if it is blocked.

"Stop the talk about insolvency – that is damaging to the business," Franz said.

Smaller rallies were being held at factories in Bochum and Kaiserslautern.

GM's move has been heavily criticized by German politicians, who had given strong backing to the Magna deal. The employees fear GM's decision to restructure Adam Opel GmbH on its own could result in bigger layoffs and job cuts in Germany.

John Smith, GM's chief negotiator for the sale of Opel, said Wednesday that GM's plan was similar but not identical to that presented by Magna and Sberbank, which had called for the elimination of 10,500 European jobs or about 20 percent of the work force.

Smith did not elaborate on possible job losses.

The GM board's unexpected decision to call off the sale to Canadian auto parts maker Magna International Inc.and Russian lender Sberbank was a startling end to months of haggling in which Chancellor Angela Merkel and other German leaders had strongly backed the deal.

Still, the decision won a cautious welcome from union officials in Britain and Poland, where workers had feared possible cutbacks in a Magna takeover.

GM's decision handed Merkel's new center-right coalition government an unwelcome test just a week after taking office. German officials swiftly demanded a restructuring plan from Detroit and vowed to recover by Nov. 30 a euro1.5 billion ($2.2 billion) bridge loan granted to keep Opel afloat as a buyer was sought.

`We will get the taxpayers' money back," new Economy Minister Rainer Bruederle told reporters. "Dealing with employees in this way eight weeks before Christmas is in no way acceptable," he added.

John Smith, GM's chief negotiator for the sale of Opel, said the U.S. automaker would repay the loan "if we're requested to do so" by Germany.

`We've already begun to repay some of the bridge loan," Smith told reporters in a conference call. "All that is outstanding is roughly euro900 million."

Merkel, who was flying home from a speech to the U.S. Congress when GM announced its decision, made no public comment Wednesday, but officials made clear their annoyance.

Spokesman Ulrich Wilhelm criticized GM's "surprising 180-degree turn" and said Merkel may soon speak with President Barack Obama about the issue. GM is majority owned by the U.S. government, which said it wasn't involved in the decision to keep Opel.

On Wednesday, Merkel spoke with Opel's chief employee representative, Klaus Franz, who said it was "a black day for Opel."

Russia, which had backed the Magna-Sberbank plan, also was caught by surprise.

`The decision by GM to turn down the deal was astonishing," state news agencies quoted Prime Minister Vladimir Putin's spokesman, Dmitry Peskov, as saying.

Germany had promised euro4.5 billion in further financing to support plans for Magna and Sberbank to take a 55 percent stake in Opel – a pledge that drew concerns from the European Union's competition commissioner.

With those plans off the table, Germany appeared unenthusiastic about pledging any new support – though it wasn't ruling it out.

In Spain, Industry Minister Miguel Sebastian said Madrid would not make concessions to GM beyond a deal it had with Magna to accept 900 job cuts at Opel's Zaragoza plant.

`We are not willing to budge even an inch," he said.

The mood was different in Poland and Britain, where workers had feared pressure to save jobs in Germany would leave them bearing the brunt of cutbacks.

Magna had said it planned to cut about 10,500 of the 50,000 jobs at Opel and sister brand Vauxhall in Europe, with less than half the job cuts, or around 4,500, in Germany – home to around half the work force. It also said it would keep all four German plants open.

`The future is still uncertain, but our fear is smaller," said Miroslaw Rzezniczek, a Solidarity union official at the Gliwice plant in Poland. "Magna ... did not want to guarantee that our plant will not be closed."

Despite the lack of details, "I am pleased we will be dealing with GM because we know them and we understand their culture – and they know us," said John Featherstone, a Unite union official at Vauxhall's Ellesmere Port, England plant.

There was plenty of resignation, but little optimism, at the Ruesselsheim plant in Germany, where Adam Opel GmbH has its headquarters.

`They led us all around by our noses," worker Michael Kleinmann said. "They're not interested in the fate of individuals."

Co-worker Ali Yildiz said: "Now everything's possible again, just like a year ago."

thestar.com