Opel To Halt Production At Two Plants

William Maley

Staff Writer - CheersandGears.com

August 24, 2012

General Motors will be closing down two Opel plants for a total of four weeks in response to a drop in demand for cars in Europe.

A report from Reuters says an agreement between Opel and labor representatives will have two plants, Ruesselsheim and a component plant in Kaiserslautern, to halt production for a total of 20 working days between September and the end of the year.

“The European automobile market is declining dramatically. Now, shortened working hours are the correct measure to bridge the weakness of the market,” said Opel's head of personnel, Holger Kimmes.

The decision to halt production is a “Kurzarbeit” (German for “short work”). Kurzarbeit is a temporary measure that allows companies to shorten hours to deal with ininsufficient demand. Workers can be sent home without or with reduced pay, and will get unemployment benefits of up to 67% of their normal pay.

9,300 blue and white collar workers at Opel are affected.

However, analysts said that closing down plants won't help at all.

"Closing down plants for a few days isn't going to help Opel with its most pressing problem of overcapacity," said Frankfurt-based Commerzbank analyst Sascha Gommel.

Source: Reuters, The Truth About Cars

William Maley is a staff writer for Cheers & Gears. He can be reached at [email protected] or you can follow him on twitter at @realmudmonster.