Workers’ assembly at GM-Opel plant

Opel, the German based subsidiary of General Motors (GM), recently announced the closure of its Azambuja plant, north of Lisbon, Portugal. Worker representatives at the company fear that the plant closure is the first of a series of rationalisation measures aimed at cutting excess capacity and reorganising Opel’s manufacturing activities. Such measures could result in 30,000 job losses across Europe, primarily affecting production capacity in the former EU15 Member States. On 23 June 2006, a workers’ assembly was held at the Szentgotthárd plant, Hungary, serving both as a solidarity action and as an opportunity for acquiring information on the reorganisation of GM-Opel on a European scale.

Opel, the German-based subsidiary of General Motors (GM), has announced the closure of its Azambuja plant, north of Lisbon in Portugal, affecting 1,100 jobs. In May 2006, the car manufacturer had also announced that the third shift at its Vauxhall Astra plant in Ellesmere Port in northwest England would be phased out, representing 950 job losses, and casting doubts on the long-term viability of the factory (UK0606019I). Further job cuts are expected in the company’s plants in Antwerp, Belgium, and Bochum, Germany, which also manufacture the Astra model.

These redundancies indicate that the plants manufacturing the Astra model in west Europe are particularly vulnerable, especially since the model is expected to be changed in 2010, potentially leading to the closure of two out of five plants. A Swedish GM Powertrain plant based in Soedertaelje, near Stockholm, is also thought to be at risk.

European-wide strike action

European worker representatives fear that the announcement from Portugal is the first step in a series of streamlining measures intended to cut excess capacity and to reorganise Opel’s manufacturing activities. They estimate that plant closures will result in losses of 30,000 jobs at European level in the next decade, primarily in the former EU15 Member States.

Head of GM’s European Employee Forum (EEF), Klaus Franz, considers the closure of the Azambuja plant to be the first step towards relocating manufacturing activity from the EU15 to more east European countries. Indeed, in parallel with the planned closure in Portugal, GM began the construction of its first fully-owned Russian plant and is believed to be planning to invest in another facility in Poland. GM’s management also made it clear that it would further develop production capacity in Asia and east Europe, and expects cost cuts and improved productivity from these investments.

In view of the forthcoming restructuring plans, the employee representatives of the GM European Economic Committee (EEC) formally requested an extraordinary meeting of the EEC Steering Committee in addition to the meeting of the GM EEF held in March 2006. The closure of the Azambuja plant inititially led to local industrial action and subsequently to the so-called ‘Euro-strike’ across European GM production facilities.

GM’s Portuguese workers launched a series of strikes to protest against the planned closure of the Azambuja plant, and further industrial action is planned. On 20 June, a demonstration strike was held in Rüsselsheim, Germany and Zaragoza, Spain, while a three-hour demonstration strike was held on 21 June in the Aspern plant near Vienna in Austria. Further action is expected at the German factories of Rüsselsheim, Bochum and Eisenach. In addition, it is alleged that workers across GM’s European production network are refusing to work agreed overtime shifts.

The labour unrest, coinciding with the 2006 football World Cup in Germany, forced GM Europe to resort to emergency airlifts of components to keep plants running.

Hungarian workers’ action

Workers of the Szentgotthárd plant, Hungary, also joined the European-wide mobilisation. On 23 June, during regular working hours, they held a workers’ assembly at the request of the plant’s works council to inform employees of the European-scale changes at GM-Opel, based on information received at the last meeting of the GM EEC. Reportedly, 300 to 350 workers – almost the entire afternoon shift – participated in the assembly, which lasted one hour.

Management of the plant downplayed the importance of the assembly, commenting that it is customary in the plant to have such information meetings for staff, although this time worker representatives requested holding an assembly. Management also emphasised the importance of cooperation between management and worker representatives for the future of the plant.

Commentary

GM began reorganisation of its European manufacturing network in the context of increasing investment in new Member States and in countries further east, including in Asia. Furthermore, worker representatives at west European plants are under increasing pressure to make concessions to improve their competitiveness.

It is important to note that opening new plants in central and east Europe is not the only danger for west European units. GM Global Development Chief, Bob Lutz, openly stated in an interview that development in Korea and China is the future of GM’s production. Notwithstanding this threat, west Europe remains a large and important market, with a well-functioning infrastructure of state of the art manufacturing plants and supplier networks. Moreover, large-scale closures could antagonise loyal car buyers, which is a danger for any company.

Industry analysts at KPMG expect to see production capacity growth in both east and west Europe, although at a steeper rate in the east region. It is unlikely that GM or any major vehicle manufacturer would relocate manufacturing to the cheapest location on a large scale. Nevertheless, capacity rationalisation and incremental spatial reorganisation seems to be an ongoing trend.

The European-wide workers’ mobilisation indicates that tensions will continue to mount in the coming years, as even wider cuts are expected in west European manufacturing units. The likely labour protest – as was exemplified by the series of European-wide demonstrations – could be significant in shaping management decisions. As part of this process, it is an important signal that Hungarian workers also expressed their solidarity with their west European colleagues.

András Tóth and László Neumann, Institute of Political Science, Hungarian Academy of Sciences