Duesseldorf, Germany - A threatened Opel car plant in the German city of Bochum will not now be closed, General Motors' (GM) European Chief Executive Nick Reilly said Tuesday. The 4,900 staff at the plant in western Germany had feared closure under GM's forthcoming restructuring plan, details of which are expected to be presented to labour representatives on Wednesday.
GM reversed its decision to sell Opel in earlier in November, saying improved prospects for the car industry meant it could make Opel profitable again by itself.
According to a report in the Sueddeutsche Zeitung Tuesday, GM will on Tuesday pay the last installment of 400 million euros (598 million dollars) that it owes the German government, who had made 1.5 bn euros available to buy time for Opel to be sold off.
Speaking in Berlin, Chancellor Angela Merkel greeted the news by saying that without the German government's money, Opel would have collapsed.
"The German taxpayer has not lost a cent on Opel," Merkel said, but added that she would have preferred to see the carmaker sold to an Austrian-Russian consortium led by Magna, as had been agreed until GM's dramatic U-turn.
The news that the Bochum factory will not now be closed will be a boost to Juergen Ruettgers, the state premier of Nordrhein-Westfalen where the plant is located.
Ruettgers, from Angela Merkel's Christian Democrats (CDU), faces a tight state election contest in May 2010. Ruettgers had campaigned alongside Bochum workers for the plant to remain open.
Ruettgers however said that any aid from his state government to GM to help restructure the plant would depend on there being no compulsory redundancies.
On Monday Reilly met in Brussels with officials of EU states where Opel has plants, and said GM's 4.9-billion-dollar restructuring plan would involve between 9,000 and 9,500 job cuts across the firm.
Opel employs some 50,000 people in Europe, half of them in Germany.
The officials agreed in Brussels not to enter into a "subsidy war", whereby countries with Opel plants would compete to offer restructuring cash to GM in a bid to stave off job losses on their own territory.
Spanish Prime Minister Jose Luis Rodriguez Zapatero is due to meet German Chancellor Angela Merkel on Wednesday, when the two are expected to discuss the Opel restructuring plan. Opel employs some 7,200 people in Spain.
