GM’s restructuring of its Opel division has long been seen as one of the greatest threats to The General’s US taxpayer-supplied cash pile, and the bleeding has now officially started. Reuters reports that GM has agreed to pay four hundred million Euros ($532,000) for worker termination benefits as it closes operations at its Opel plant in Antwerp, Belgium. The 2,600 employees who once built Opel Astras at the factory will be out of work by the end of the year, with about 1,250 planned to be terminated by June. The Flemish government has until September to find a new investor for the plant location; if it is successful, and the new tenant rehires the former Opel workers, GM could be off the hook for some of their termination costs. Considering that Europe has some of the worst auto overcapacity around though, the odds of another automaker taking over the plant don’t look good. Which means the fate of Opel’s Flemish workers, and the health of GM’s cash pile are likely in the hands of a non-auto industry investor. Meanwhile, with Opel planning on cutting 20 percent of its European capacity, the bleeding is only just beginning. But hey, is there a better use for American tax dollars than paying off European workers to the tune of $205k per job?
What other choice does GM have? Keep open a plant they don’t need?
Whatever happened to the good old days when fired employees were sent packing with six months pay, to give the motivated ample time to find alternate employment?
Ah, I forgot. Unions.
I think you mistyped “agreements negotiated between adults”. Presumably the employees sacrificed some other benefits in order to secure better redundancy payments. Presumably the company thought the cost benefit equation made sense.
Union bashing to begin in 3…2…1…
Attempting to label money in the GM bank accounts as “OK” for this purpose or “not OK” for these other purposes is a waste of time. If they have the money, they will use the money for purposes of running their business. We hope they will use it wisely. If they use their money wisely, we will make our $50B+ investment in their company back.
Could somebody remind us all again why this could not have been dealt with in the bankruptcy of a year ago? My memory is that GM could not jettison any of the european assets because they were shaking the european governments for money.
And GM needs Opel because a lot of its auto development is done there. The US operation don’t seem to have much auto development – seems like every new model is based on some Opel platform…a few Daewoo platforms….trucks maybe from the US. Where is the real expertise located?
“And GM needs Opel because a lot of its auto development is done there. The US operation don’t seem to have much auto development – seems like every new model is based on some Opel platform…a few Daewoo platforms….trucks maybe from the US. Where is the real expertise located?”
That’s about it, but let’s assume that the new super-cool cup holders for your next Silverado will possibly be designed here!
“four hundred million Euros ($532,000)”
How about “no”?
Plus the money GM paid to Magna and Sperbank for screwing up the Opel deal, the amount not revealed, but likely $100 million.
If GM did not pay for redundancies at the Belgian plant, it would quickly find that its European assets would be seized to pay the cost anyway. There is no way out for them.
As Henny Youngmen would say, take my assets………….please.
In all fairness, their will be some skimming off the top of the $.5B for management types and general pocket greasing. The remaining $.4B will then be split by the workers. That would only be $154K per worker. Put some taxation in there to give DE their lunch money and each worker is getting maybe $100K.
Let’s compare that to a factory worker here in the US working in a non-GM factory.
Worker gets laid off. Worker gets 2 weeks severance. Worker makes $40K annually which would be about $1500 for two weeks pre-tax. After taxes maybe $1200.
Lesson learned is that if you work for a company making money they won’t pay you for nothing because they need to be profitable. If you work for a company, that is not profitable, that has free credit/cash you can get paid significantly more.