GM May Give Opel Workers Stake to Win Deal
(Bloomberg)—General Motors Co. is considering granting workers at the Adam Opel GmbH division a stake in the unit as the biggest U.S. automaker seeks to secure a deal on labor concessions in Europe.
An employee shareholding, along with profit sharing and the division's conversion into a German joint-stock company "can be part of the final settlement," Nick Reilly, who was appointed president of GM Europe today after running the unit on a temporary basis, said at a press briefing at Opel headquarters in the Frankfurt suburb of Ruesselsheim.
GM decided last month against selling Opel to Magna International Inc. (MGA) and instead plans a 3.3 billion-euro ($5 billion) reorganization of the unprofitable unit that would be financed mainly by European Union nations. Reilly said following a meeting with EU industry ministers in Brussels today that the plan's completion may take until the beginning of January.
The U.S. company is seeking 2.7 billion euros from EU countries where Opel and its sister Vauxhall brand have plants, with GM providing the remaining 600 million euros. Swedish Industry Minister Maud Olofsson, who led the meeting of her EU counterparts with Reilly, said before the gathering that GM won't be permitted to receive assistance that kept jobs in one nation at the expense of employees elsewhere in the bloc.
"We will not allow GM to go to each and every country to negotiate about state aid," Olofsson told reporters in Brussels today. The EU must "stick to the rules—no state-aid race."
Signals on Aid Opel builds cars in five EU countries and has parts factories in two others. Reilly said he has received positive signals from European governments on the Opel aid request.
"I don't know if it will be 2.7 billion euros, but I am optimistic we will get a lot of government support," Reilly said. Any assistance will conform to EU laws, and "we're not in a bidding war for support."
GM may need to provide more of its own funding to Opel before Germany agrees to give support, said Hendrik Hering, economy minister of the state of Rhineland-Palatinate, where Opel has about 3,200 employees.
"It's only legitimate to expect them to come up with a higher amount" than 600 million euros, Hering said today by phone. "As the owner, GM knows full well that eventually it will have to pay more."
A pledge to allow Opel to sell its cars worldwide and the possible stake for employees "are pointing in the right direction," said Hering, who met Reilly on Nov. 24.
GM's Contribution Germany's Economy Minister Rainer Bruederle told reporters today after the Brussels meeting that EU governments pledged to coordinate strategy on talks with Opel and said any funding "must not be tied to sites and jobs." He also said GM should be prepared to contribute more financing.
Reilly wants unions to agree to 265 million euros in annual savings from reduced pay and changes in working conditions. Opel's reorganization plan, which will include more than 8,000 job cuts and the possible closure of a plant in Antwerp, Belgium, had been scheduled to be released in mid-December.
Klaus Franz, the head of Opel's works council, said at the briefing that employees will only agree to concessions in return for a stake in the company and a greater role in decision- making. GM's withdrawal of plans to eliminate 548 jobs at Opel's development center in Ruesselsheim was 'positive,' he said.
The appointment of Reilly as GM Europe's president ends a search for a new chief executive officer for Opel, said Johan Willems, a spokesman.
Reilly, who as head of GM's international operations oversaw the carmaker's Asian, Middle Eastern and Latin American business, was appointed last month to run Opel's restructuring until a permanent replacement for Carl-Peter Forster was found. Forster resigned as head of GM Europe after the company backed off the planned sale of a majority stake in Opel to Magna and partner OAO Sberbank.
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