MASS DISMISSALS AND CLOSURES AT OPEL-VAUXHALL – predicts EEF GM forum

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GM Europe’s European Employee Forum (EEF) has made the most dire predictions in its February 16, 2009 report.

It states that ‘GM’s “Renaissance” plan for Europe is not viable. It will finish off the European GM brands and companies. . .’

It considers that, ‘The approval of the loans for General Motors in the United States by the Bush administration was a kind of a “poisoned gift” for the corporation. The terms of the loans to General Motors will be nearly impossible to meet.

‘The term sheets mainly focus on cutting labour costs with potential plant closures and mass dismissals and did not specifically offer ideas about increasing revenue and developing new products.

‘The obligation for General Motors to pay back the loans starting in 2011/12 will have the result of preventing investments in future products which are especially needed under the new rules for fuel efficiency of the Obama administration and the global C02 challenges.’

It says the following about the ‘management restructuring plan formulated in Detroit for Europe, known internally as project "Renaissance”.

‘The current plan could include for the OpelVauxhall brand and the GM/OpelVauxhall subsidiaries mass dismissals and probably several plant closures.

‘This would have disastrous consequences for the GM brands and companies in Europe and will finish them off.

‘Moreover, the plan is not viable taking in consideration the needed loans guaranteed by European governments and the existing legally binding contracts on the European and national level.’

The EEF report reveals that GM Europe has been in negotiations with several European governments about guarantee loans to safeguard the European operations on a sustainable basis.

‘These talks are taking into consideration that the corporation cannot and will not support financially the European operations any longer.

‘In addition, GM Management in Europe has been in negotiations with its European Works Council, the General Motors European Employee Forum (EEF), and with the national and local unions and works councils to cope with the current crisis affecting the European auto market.

‘The goal is to save approximately $750 million in labour costs in 2009. The first result was a European Framework agreement as a basis for national and local solutions on volume adjustments which allows the company to use flexible short-term volume adjustments and respective cost saving.

‘The EEF representatives as well as the national/local union and works council representatives requested from General Motors Europe a sustainable European business plan based on a viable business model.

‘They made clear that no business can be saved on a short-term basis by cutting only labour costs.

‘The EEF pointed out that the postponed product plan for Europe – if not changed or further postponed – will be a road to death.

‘Short-term cost savings will do nothing to avoid a collapse, because the loss of contribution margins for the subsequent years will be a tremendous burden on the company.

‘The EEF and the national/local unions and works councils are actively supporting GM’s application for government-guaranteed loans in Europe. However, their support is based on a sustainable European business plan and a viable business model which includes the necessary investments that create a future for the European brands and companies. They do not want to gamble away OpelVauxhall competitiveness in the tough European marketplace.’

On the consequences of the restructuring project for GMEurope/OpelVauxhall the report says: ‘No European government or European bank would give guaranteed loans to close plants and to dismiss thousands of employees.

‘Especially the potential use of loans guaranteed by one European government to close down a plant in another European country.

‘This would lead to major conflicts and will be avoided by any European government. This would mean also that any chance to fix the revenue side of the business would be destroyed. . .

‘The only option left would be that GME/OpelVauxhall asks for rescue-aid instead of loans guaranteed by European governments. Then it must cut capacity by 30 per cent. No company has ever survived this large a reduction.’

The report concludes: ‘Finally, every scenario with the implementation of the “Renaissance” project in Europe will ultimately lead to a collapse of OpelVauxhall within one and half to two years at the latest.

This means “scorched earth” will be left in Europe with major conflicts all the way to the end.’

It adds in its conclusions ‘The current restructuring plan for General Motors Europe and its brands and companies is not viable. It will finish off the European operations. . .’

There is only one way forward to defend jobs at OpelVauxhall. The plants must be nationalised and all attempts at sackings or closure resisted with occupations.

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