* IG Metall, GM set Oct. 31 deadline to conclude talks
* Senior union official hopeful Bochum plant can be saved
* GM could save $50-$64 mln from wage hike delay -Jefferies
(Adds analyst, more comment)
By Christiaan Hetzner and Jan Schwartz
FRANKFURT, June 14 (Reuters) – General Motors and
German labour union IG Metall have given themselves four months
to hammer out a definitive plan to restructure the loss-making
operations of Opel, the U.S. carmaker’s European brand.
“The aim of the negotiations is to create a road map for
Opel through 2016 and even beyond. I can tell you that labour is
absolutely determined to reach a fair deal,” Oliver Burkhard, a
senior IG Metall official, told Reuters on Thursday.
“If we do not get anything for the plants, including Bochum,
then we’re not going to give anything. We are not going to pay
for our own funeral.”
GM, IG Metall and Opel’s labour leaders said on Wednesday
they were in talks over a plan to end production at the
company’s Bochum plant at the end of 2016 in exchange for
guaranteeing all German jobs to the end of that period.
“We are unlikely to have certainty by the end of October
whether Bochum will be closed. But we still have a good four
years until then (the end of 2016), and when I think about all
the things that have changed in the past four years, then
nothing is written in stone,” Burkhard said.
As part of the deal, IG Metall is offering to defer a wage
increase if GM also considers shifting to Europe the manufacture
of some of the 160,000 vehicles it makes overseas and imports.
“The Chevrolet Orlando that is built in Korea shares the
same underpinnings as the Zafira built in Bochum, for example,”
Burkhard said.
This would help but it would not be sufficient to fill all
the spare capacity under the current production map of six
plants, since company insiders estimate the fixed cost base
would require it to sell half a million more vehicles per year.
Thanks to IG Metall’s permitting GM to defer throughout the
period of the talks the 4.3 percent pay hike scheduled from May,
analysts at investment bank Jefferies estimate the carmaker
could save itself anywhere between $50-$64 million this year.
“RIGHT PEOPLE”
But they argue it might also prompt other manufacturers in
Germany to pressure IG Metall into lowering their labour costs
too – especially if the union agrees to further wage concessions
on top of its existing pledge worth 177 million euros annually
through 2014.
Burkhard said his union was well aware of this risk: “I am
fairly sure that these negotiations will trigger a discussion
within the auto industry.”
Nevertheless, talks over what both sides hope will be the
final restructuring plan for Opel can begin in earnest because
the “right people” were finally sitting at the table.
“It makes no sense to discuss with the German management
what GM’s overall strategy is for Opel,” he said. “Thankfully,
we got what we wanted and General Motors, the parent, is
negotiating with us directly, so we now have a greater certainty
than before when it comes to agreements.”
Nevertheless, Burkhard believes the most urgent problems at
Opel are not its labour costs in Germany.
“We are way beyond the point of discussing whether there is
one plant too many or two, in view of all the overcapacity,” he
said. “Rather, I am worried about the company in its entirety.”
(Editing by David Goodman and Mark Potter)
