GM’s Opel plans to invest €11 billion, seeks €2.7 billion in aid as it details cuts

Opel unveils restructuring plan

FRANKFURT — General Motors Co.’s Opel unit said Tuesday that it plans to invest euro11 billion ($15 billion) through 2014 and appealed for government help as it detailed a restructuring drive that will result in about 8,300 job cuts across Europe.

Chef Executive Nick Reilly said as he presented Opel’s restructuring plan Tuesday that the automaker is seeking euro2.7 billion from European governments in loans and loan guarantees.

Parent General Motors Co. has already injected euro600 million along with euro650 million in advanced payments to ensure Opel’s cash positions.

Reilly said of the process of seeking aid: “our estimate is the overall process will take several weeks until it is completed, but we expect to have sufficient liquidity during this period.”

The figure for job losses was in line with that previously given. Opel and British sister brand Vauxhall employ around 48,000 people in Europe, about half of them in Germany.

“We have no time to waste,” Reilly said. “We need a plan that is going to be realistic about the tremendous economic pressures we face.”

“We are confident that we have a plan for the future that will work and deliver results,” he said, adding the company hopes to break even by 2011 and “make a decent profit in 2012.”

The job cuts will include 1,300 sales and administration positions along with cuts at most of the automaker’s manufacturing plants in Europe, Opel said.

It reiterated that it plans to close the Antwerp, Belgium plant, and let go 2,377 workers there. Production of the Astra HB3 will be transferred to Bochum.

Elsewhere, the company will cut 1,799 jobs in Bochum, Germany; 900 positions in Zaragoza, Spain; 892 in Ruesselsheim, Germany, where Opel is headquartered; 300 at Eisenach, also in Germany; 369 in Luton, England; and 300 in Kaiserslautern, Germany.

However, the plants in Gliwice, Poland and Ellesmere Port, England, are set to escape any cuts.

Opel board member Reinald Hoben said that, independently of the restructuring program, some 2,000 people in Germany previously signed up for early retirement programs will be leaving through 2012 and 2013.

The 8,300 figure includes about 500 of those employees, Hoben said. Of the remaining 1,500, about 650 will replaced will be replaced by new hires to ensure that “critical skills” are maintained, he added.

Reilly said the automaker would focus on three areas: making quality, desirable cars; developing alternative propulsion and expanding into growth markets in the Middle East and Asia.

“Several studies are underway to look at export programs,” Reilly said, “but I want to be clear: we are only going to expand in those areas where it is economically viable.”