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BERLIN, Aug. 3 (Xinhua) — German carmaker Opel has been forced to throttle the pace of production on its assembly lines due to weaker than expected sales, the newspaper Mainzer Allgemeine Zeitung reported on Friday.
Responding to the report, the Ruesselsheim-based company merely confirmed that vehicle manufacturing output was regularly adjusted in response to market conditions without providing further details. Since its acquisition by the French PSA group in 2017, Opel has come under heavy pressure from its new owners to agree to corporate reforms aimed at improving its weak profitability.
According to Mainzer Allgemeine Zeitung, the number of vehicles assembled per hour at the Ruesselsheim and Eisenach plants was scheduled to fall by more than 25 percent when workers returned from their summer holidays. The report cited weaker customer demand as the reason for the decision by management.
A slower pace of reduction at automotive industry companies usually does not imply job losses but results in higher fixed and personnel costs per vehicle. As a consequence, a need to slow Opel assembly lines could deal a blow to recent hopes that the carmaker was on the verge of a turn-around. During the first half year of 2018, cost reductions at Opel allowed it to achieve the first operative profit again after a long series of loss-making business quarters.
In spite of reaching an earlier agreement between PSA and Opel not to close any factories in Germany and refrain from further involuntary lay-offs of staff until 2023, the Opel workers’ council has recently urged the management board of the company to clarify reports that it plans to sell parts of the Ruesselsheim-based development center. “A sell-off of the Opel development branch would rob Opel of its future”, the workers’ council warned.
Following its acquisition by the PSA, Opel’s management board became locked in a heated and protracted dispute with workers sparked by the announcement of far-reaching corporate restructuring plans and related job cuts. The trade union IG Metall hereby repeatedly sought to convince PSA to commit to a binding and concrete production plans for Opel plants in Ruesselsheim, Eisenach and Kaiserslautern.
Having reached a compromise between back in May, chief executive officer (CEO) Michael Lohscheller at the time vowed to “keep all Opel plants in Germany and Europe and make all plants competitive.” “Opel will stay German”, he added.
Amongst others, the basic “PACE” framework for restructuring measures jointly-agreed by employer- and employee representatives includes plans to reduce staffing levels by 3,700 in Germany and temporarily postpone wage increases. In exchange, the remaining staff have been offered employment guarantees until 2023.
Wolfgang Schaefer-Klug, the president of the Opel workers’ council, has described the compromise as acceptable to staff and “irrevocably binding.” He highlighted that 3,600 out of the planned 3,700 job loses had already been achieved on a voluntary basis through part-time arrangements and severance payments.