General Motors Co. reached an agreement with Adam Opel GmbH workers to cut labor spending by 265 million euros ($331 million) a year to help finance a reorganization of the unprofitable unit.
Unions agreed to waive one-time payments, postpone a planned 2.7 percent salary increase, and reduce Christmas and vacation bonuses by 50 percent for two years, Opel said today in an e-mailed statement. The concessions are contingent on GM investing in new models, including a convertible and a subcompact smaller than the Corsa model.
"We have made major progress on building a sustainable, long-term future," Nick Reilly, Opel's chief executive said today at a press conference at the unit's headquarters in Ruesselsheim near Frankfurt.
Opel management and union leaders have been negotiating over concessions for months in an effort to return Opel to profit by 2012. GM has committed 1.9 billion euros to the restructuring, which the Detroit-based automaker projects will cost 3.7 billion euros. GM is requesting loan guarantees from Germany and other countries where it operates for the rest.
The worker's savings will be set aside and returned to employees if GM reneges on agreements to invest 11 billion euros in new models and electric-powered vehicles.
"Employees demonstrated that they are ready and willing to contribute to the company's future, when they are offered security and long-term prospects in return," Klaus Franz, Opel's top labor leader, said. "That way, the prerequisites for government guarantees are fulfilled as well."
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