General Motors Opel Division plans on halting vehicle production at its Bochum, Germany plant two years earlier than expected.
The Opel division decline could occur two years earlier than originally anticipated from its projected 2016 timing. The key driver of its Opel plant demise is linked to higher costs and a loss producing brand in a poorly performing country region.
Steve Girsky (Chairman of Opel's Board of Directors / GM Vice Chairman) sent a letter last Thursday to employees sharing the focused need for "further significant savings" and flexibility. The struggling European division would come to end 1/1/2015 once an existing agreement comes to closure which had kept the facility in operation. Girsky translated the economic situation as "catastrophic" in his opinion.
The plan had been to stop producing the current production Zaifira Tourer MPV model at the end of 2016. Negotiations instead have incurred and have been ongoing since last June/2012. Employee representatives have worked to decipher an effective turnaround plan to circumvent any plant shut down. Opel expected resolution in February/2013 concerning the negotiations but that may all be but decided now.
Johanna Lomp-Knetsch (Opel Spokeswoman) indicated that Opel, however, will stand by the plan presented in December/2012 to keep the plant operational going until 2016 until negotiations have settled.
Opel like many other OEM's have been tasked with dealing in an economic glut of doom and gloom which remains pervasive throughout Europe. Overcapacity is prevailing throughout the automotive industry which makes selecting any new models that much more challenging from a market perspective. Opel's magic formula includes new vehicle models, extensive cost cuts and a strong push to achieve new export moneys.