March 27, 2012 / 11:23 PM / 7 years ago

Car plants in balance as Opel board meets

FRANKFURT (Reuters) - The board of loss-making European carmaker Opel meets on Thursday under pressure from U.S. parent General Motors (GM.N) to stop the rot, with thousands of workers in Germany and Britain fearing the closure of their plants.

Economic weakness across much of Europe has hit car sales, forcing makers to confront bloated fixed costs and a capacity overhang in the sector that GM Chief Executive Dan Akerson estimates at 10 plants across the continent.

Few in Europe have so far been closed; Opel’s own Antwerp plant, Fiat’s FIA.MI woefully uneconomical Sicilian plant, and the Trollhattan factory of insolvent carmaker Saab. Mitsubishi is ending car production in its Netherlands facility by year-end.

But Europe still has around 240 plants in 27 countries.

In the United States, Detroit’s big three automakers - GM, Ford (F.N) and Chrysler, now partnered with Fiat - closed 13 plants between 2008 and 2012.

Though Opel has said no plants will go before the end of 2014, most expect the factory at Bochum in western Germany will be earmarked for closure, along with one at Ellesmere Port, the company’s only remaining car plant in the UK, where the brand is known as Vauxhall.

Opel is in discussions with its unions about measures to cut costs, but talks could be broken off entirely should the supervisory board vote on Wednesday in favor of concrete steps to close factories.

“Opel Bochum’s employees are rightly asking themselves, ‘What happens after 2014?’ Plant closures have not been taken off the negotiating table, just the opposite,” a statement from the plant’s works council said on Tuesday.

The Bochum plant directly employs about 3,100, but the works council estimates its closure would cost 45,000 jobs when related services companies and suppliers are added in.

Labor leaders, who make up half of Opel’s 20-strong board, plan to vote on Wednesday against any mid-term business plan that foresees the outright closure of a factory.

Ellesemere Port employs about 2,100 plus 700 contractors.

Auto analysts expect a wave of plant closures across the continent at other beleaguered carmakers, such as PSA Peugeot Citroen (PEUP.PA), Renault (RENA.PA) and Fiat.

Action taken by Opel could be of particular significance for workers at Peugeot, which has agreed a cooperation deal with GM that is predicated upon each restructuring their European operations and sharing platforms to cut costs.

Analysts estimate that Peugeot has an even greater need to close down factories than Opel, in part because GM already reduced its fixed costs by 20 percent during 2010 and 2011 with the closure of the Antwerp plant and downsizing elsewhere.

Separately, the Opel board is expected to approve Alfred Rieck as new sales chief, after Alain Visser accepted a new position in Chevrolet’s marketing.

Reporting by Christiaan Hetzner; Editing by Will Waterman

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