More layoffs at Opel?

Opel's European works council says General Motors' decision to restructure the German-based carmaker may require even more layoffs than previously expected.

Following a meeting with the company's Chief Executive Nick Reilly, labor leaders said in a statement that the number of jobs at risk throughout Europe is 2,000 higher than the 8,300 positions already on the chopping block.

Unions say Germany and Belgium are likely to be hit the hardest in terms of total number of cuts under the revised plan. Some 4,800 people would be laid off in Germany, including members of management, while the closure of the Opel manufacturing plant in Antwerp would cost another 2,600 jobs.

Opel management has rejected the labor leaders' criticism as unreasonable, arguing that the 2,000 'additional' losses were actually early retirement deals unrelated to restructuring efforts.

A company spokesman told the German press agency dpa that Opel was sticking to its original plan to cut 8,300 jobs across Europe as it reduces production by 20 percent in response to weakened demand for vehicles.

Looking for loans

Reuters news agency quoted labor leaders who said they learned in the meeting with Reilly that Opel no longer planned to reduce management costs by 35 percent and that, on the contrary, new management staff has been hired.

Last week CEO Reilly announced he wanted to reach an agreement with the works council by mid-February on a plan to help the carmaker shrink to a profitable size. However, labor leaders have frozen negotiations with GM over the automaker's proposal to make 265 million euros ($372.1 million) in annual wage cuts across the continent over the next five years, insisting that the Antwerp plant should stay open.

GM has also asked for 2.7 billion euros in state aid in the form of either loans or loan guarantees to help finance the 3.3 billion euro revamp. Reilly said that all countries that host major Opel manufacturing sites, with the exception of Belgium, have indicated they remain open in principle to extending state funding.

Opel is expected to submit a formal aid application to Germany within the next few days, once the company obtains the required independent expert opinion on the viability of Reilly's plan. Reilly has said that Opel currently has enough liquidity to operate "well into the second quarter."

mrm/Reuters/dpa
Editor: Sam Edmonds