Magna to Cut 10,500 Jobs at Opel

The co-head of Canadian auto parts maker Magna said on Sept. 14 that it planned to cut 10,500 posts at loss-making German car maker Opel once it completes its takeover of the General Motors’ unit.

Co-chief executive Siegfried Wolf said his group, which agreed last week to buy a majority stake in Opel from General Motors, was sticking with plans to cut jobs at Opel and its sister brand Vauxhall in Britain.

He confirmed figures reported over the weekend in the German media but said Magna had not modified its terms since late May, when it first signed a memorandum of understanding with GM on the deal. “Our plans haven’t changed since May 31,” Wolf said at a briefing in Frankfurt ahead of the international auto show.

Previously, the figure reported was 10,000 job cuts. The Opel business, including Vauxhall, employs some 50,000 workers across Europe.

Wolf did not say where the job cuts would be made, a sensitive topic as Germany gears up for national polls on September 27.

German Economy Minister Karl-Theodor zu Guttenberg told the newspaper Bild am Sonntag that he believed the cuts were deeper than those estimated earlier by Magna.

Wolf stressed that Opel could be made profitable again by 2015 and dismissed allegations that Magna would invest 600 million euros (US$870 million) of German taxpayers’ money in Russia.

Germany has extended a bridging loan worth 1.5 billion euros to keep Opel going until the takeover is completed, along with loan guarantees worth another three billion euros to get the new company started. Other European Union countries with Opel plants, such as Britain, Poland and Spain, are worried that Germany’s generous aid may mean German jobs take preference and that it could breach European Union rules on state aid. Germany is seeking support from the other countries meanwhile to eventually reduce its own contribution.

This entry was posted in Business and tagged . Bookmark the permalink.

Leave a Reply

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.