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Germans against offering aid to GM-owned Opel

After last week’s shock decision by General Motors to hold onto Opel rather than selling it to the Canadian company Magna, a new poll shows that a clear majority of Germans against offering aid to the company if it asks for state aid.

Published: 8 November 2009 11:16 CET

Germans against offering aid to GM-owned Opel

Photo: DPA

If General Motors asks the German government to offer loan guarantees to finance its planned €3 billion overhaul of the iconic carmaker, 66 percent of respondents to the poll, sponsored by the Bild am Sonntag newspaper, said they were against such aid. Just 28 percent said they favoured assistance.

GM is highly likely to ask Germany, as well as other European countries where Opel facilities are located, to help pay for the company’s reinvention, though the political winds in Germany in particular are blowing against it.

When news of GM’s decision broke last week, the newly sworn-in Economy Minister Rainer Brüderle said the move was “totally unacceptable” and has since said he is sceptical that Germany will offer additional assistance.

Opel is currently operating in a trusteeship set up by the German government in spring to help facilitate a quick sale to another company. The government also extended a €1.5 billion line of credit to keep the company solvent through the process.

Brüderle and many other German politicians have demanded that GM repay the credit – initially due to be repaid by the end of November – immediately now that it has decided to hold onto Opel.

GM’s restructuring plans are said to be similar to the one put forward by Magna and will entail approximately 10,000 layoffs throughout Europe out of a workforce of approximately 50,000. Unlike the Magna plan, which to satisfy the German government proposed closing none of Opel’s German facilities, GM is thought to plan the closure of at least one German site.

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Volkswagen: Are 30,000 jobs at risk of being cut in Germany?

Up to 30,000 jobs at VW locations across Germany are at risk of being slashed, German media outlet ‘Manager Magazin’ reported on Thursday, citing sources.

There are around 120,000 staff at six plants in the German cities of Wolfsburg, Brunswick, Hanover, Salzgitter, Emden and Kassel, as well as at Volkswagen Services, Volkswagen Immobilien and digital solutions company dx.one. The company also attracts international workers.

As of 2020, 6.4 percent of Volkswagen’s workforce were foreign.

Volkswagen, which is Europe’s largest car manufacturer, has not confirmed reports on the number of job losses.

According to an article published on Friday by German broadcaster NDR, VW’s intranet released a statement to employees saying that the works council and the company “reject the alleged target of cutting 30,000 jobs”.

However, the firm did say that it needs to make savings. A company spokeswoman told German media: “One thing is clear – Volkswagen must reduce its costs at its German sites. This is the only way the brand can earn enough money to invest in the future.

“How we achieve this goal together with the employee representatives is part of the upcoming talks,” she said.

What’s happening at Volkswagen?

Volkswagen recently cancelled a job security agreement with the trade unions that had been in place since 1994. It means that jobs are now only guaranteed until the end of June 2025 compared with 2029 previously – unless another agreement is reached.

The company said that if there is a return to the collective agreement prior to January 1st, 1994 “redundancies for operational reasons cannot be ruled out”.

The firm, which cites high costs in its core brand VW Passengers Cards, also said plant closures may be on the cards. It is the first time that the company has considered closing some of its factories in its 87-year history.

READ ALSO: Will there be job losses and plant closures at Volkswagen in Germany?

What else do media reports say?

According to the media report in Manager Magazin released on Thursday, the crisis-hit car manufacturer could also cut its investment plans from €170 billion to €160 billion over the next five years.

The business outlet reported that the situation could be particularly bleak in VW’s research and development fields. According to some forecasts, 4,000 to 6,000 of the approximately 13,000 employees in Germany may face losing their jobs, the outlet stated.

According to insiders, the savings are necessary because many group divisions are lagging behind their expected revenues. The report states that the VW core brand alone is around €4 billion behind expected returns this year.

In the first half of this year, VW suffered from sluggish demand for new cars. Business has been particularly weak in China, where the VW Group sells about a third of all its cars. Sales shrank by 2.4 percent to 4.3 million vehicles.

Due to less demand for e-cars in particular, the group has also reduced production at some locations. The plants in Wolfsburg, Emden, Zwickau and at Audi in Ingolstadt and Neckarsulm have reduced capacity by a quarter and cancelled expensive night shifts.

Trades union IG Metall has vowed to fight back against cuts.

“First of all, the threat of mass layoffs and plant closures must be off the table,” IG Metall trade union spokesperson Jan Mentrup told The Local recently.

READ ALSO: German union not ruling out strikes if Volkswagen talks fail

The union has also threatened strike action. Mentrup said that “warning strikes could follow from December 1st after the end of the peace obligation”.

Negotiations, which the union hopes will result in new collective agreement, are set to begin on September 25th.

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