Government gives up on Opel Antwerp

Summary

Flanders' minister-president Kris Peeters last weekend appeared to abandon hope of a rescue for Opel Antwerp, after Magna, the Austrian-Canadian company seen as the last chance of a solution, revealed plans to close the plant. Magna would shut the factory in March next year if its takeover bid is successful, according to a confidential report leaked to the Austrian business weekly Format.

The Antwerp branch could close as early as March
 
The Antwerp branch could close as early as March

“No false hope” as bid favourite plans closure

Flanders' minister-president Kris Peeters last weekend appeared to abandon hope of a rescue for Opel Antwerp, after Magna, the Austrian-Canadian company seen as the last chance of a solution, revealed plans to close the plant. Magna would shut the factory in March next year if its takeover bid is successful, according to a confidential report leaked to the Austrian business weekly Format.

The report, entitled Project BEAM - Future Planning Opel 2014, covers Magna's plans for the whole of Opel should its bid to take over the European activities of General Motors prove successful. The plan, Format reports, was put to GM and to the German federal government on 17 July in Berlin. Germany has Opel facilities in four of its regions, and has played a major role in the search for a European solution to GM's problems.

The Flemish government, which has been cooperating in the quest, appears to have been sidelined. Last week Flanders wrote demanding a full explanation from Magna. The government has immersed itself fully in an attempt to prevent the closure of Opel Antwerp, and sent a three-man delegation to the US - then-work minister Frank Vandenbroucke, economy minister Patricia Ceysens and Peeters himself. Their bid to represent Antwerp's interests in the face of overwhelming competition from Germany, appears to have been unsuccessful.

The Germans, however, do not get off unscathed. As well as the closure of Opel Antwerp with the loss of 2,300 jobs, the Magna plan foresees the loss of 10,500 jobs across the continent, in addition to €264 million in savings achieved by cutting holiday and end-of-year premiums. Another €329 million would be saved between 2009 and 2014 by the introduction of "more efficiency and synergies".

"Production in Belgium," the plan says, "will be stopped in 2010 for reasons of profitability." Current production at Antwerp stands at 76,000 units. Elsewhere, production (currently at between 50% and 70% of capacity) will be increased to 100%. Total European production would rise from 1.25 million units in 2009-2010 to 1.6 million by 2014.

The plan also involves the investment of €566 million in Russia between now and 2014, with Russian operations contributing €125 million to profits by that date. Total losses for 2009 are forecast at just under €2 billion, going down next year to €1.6 billion.

"A closure is completely unacceptable," said union representative Rudi Kennes. "Not only for us, but for the European board. We will fight this with every means at our disposal." Magna is one of two bidders still at the table. The other is RHJ, the Brussels-based holding company whose portfolio includes auto-parts manufacturers Asahi Tec and Honsel International Technologies. Leaked several days before Magna's, the RHJ business plan also involves the closure of Opel Antwerp in 2010.

A spokesman for Magna last week said the leaked business plan was not the final version of the document, which has already been sent to GM in its definitive form. The company declined to say what different fate, if any, the new document reserves for Opel Antwerp.

Last week Peeters, together with new minister Ingrid Lieten (public investment) and Philippe Muyters (work), held a meeting with union representatives where it was agreed urgently to seek full details from both Magna and the parent company of RHJ. However in comments made on Friday, Peeters seemed to have bowed to the inevitable. "I'm a realist," he said. "I don't want to give anyone false hopes. We didn't manage to save Opel Antwerp." The only hope the government sees now is an intervention by the EU Commission to look into the role played in the decision by enticements offered by the German state or regions.

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Government gives up on Opel Antwerp

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