General Motors Company : Opel Works Council : No Signs GM Plans To Breach Labor Deal
02/08/2012 | 05:43am The works council of General Motors Co.'s (GM) European Opel/Vauxhall brands said Wednesday it has "no indications" that the auto maker plans to breach a valid labor deal, which rules out compulsory layoffs and plant closures in Europe until the end of 2014.
In a short statement, the works council described reports about possible restructuring measures as "speculation".
The Wall Street Journal reported late Tuesday that GM is preparing to disclose "horrendous" fourth quarter losses out of its Opel/Vauxhall unit and is demanding deep cuts from labor unions there. A GM official said the auto maker's patience with the money-losing operation is running out.
"There is increasing frustration with Opel and a feeling that the cuts two years ago did not go nearly deep enough," the official said. "If Opel is going to get fixed, it is going to get fixed now and cuts are going to be deep."
With the comments, GM sent a message to labor leaders, particularly in Germany, that the company is more serious than ever about overhauling a European business unit that has lost around $14 billion since 1999. GM executives are preparing a plan for its European operation that could include more plant closings and job cuts, according to people familiar with the matter.
-By Christoph Rauwald and Sharon Terlep, Dow Jones Newswires; +49 69 29 725 512; christoph.rauwald@dowjones.com
