General Motors Co. (GM:US)’s Opel unit solidified plans to close its car plant in Bochum, Germany, at the end of 2014 after workers rejected a wage freeze, the first shutdown of an auto factory in the country since World War II.
The Opel supervisory board approved managers’ decision on halting vehicle production at the site, the Ruesselsheim, Germany-based division said today in a statement.
GM’s European operations, which also include Opel’s U.K. sister brand Vauxhall, have accumulated $18 billion in losses since 1999. The Detroit-based carmaker has vowed to break even in Europe by 2015, including plans outlined on April 10 to invest 4 billion euros ($5.2 billion) mainly to bring out 23 new models and 13 engines in three years.
The company is attempting a turnaround amid a European market that’s shrinking for a sixth consecutive year. Combined Opel and Vauxhall first-quarter sales in the region declined 7.9 percent to 208,994 vehicles, according to trade group figures released today. European industrywide deliveries fell 9.7 percent.
Workers at Bochum voted in March against forgoing pay raises in exchange for maintaining production until the end of 2016 of the Zafira minivan at the site. GM tied the agreement to a plan to expand a logistics center at Bochum and replace carmaking there with parts production after 2016 that would have maintained 1,200 of the factory’s more than 3,000 jobs.
The employment-preservation plan is “off the table” after the concessions were rejected, Ulrich Weber, an Opel spokesman, said today by phone. The carmaker has no plans to wind down the Bochum logistics center, he said.
Opel employees at the other four German plants agreed in March to wage freezes in return for GM’s pledge to refrain from mass firings until the end of 2016. The carmaker hasn’t indicated that it plans to shut any other plant besides Bochum.
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