Opel Antwerp: Doomed to Closure

Sorry, we have to leave the sexy now for the serious. The big news of the past week on the European auto-manufacturing front was the announcement – finally! – of the fate of Opel, for eighty years the General Motors subsidiary operating in Europe, especially Germany. The winner for Opel’s hand is Magna, a Canadian-Austrian investment consortium working together with the Russian Sberbank as financial partner (and also with the Russian auto company GAZ). The announcement was that GM is willing to sell to Magna a majority stake (55%) in the new company, while it retains 35% (and the Opel workers the remaining 10%).

From there the story proceeded just as it always does when a company gets a new owner, especially in the case of a failing firm where that new owner is being counted on to come in and rescue its fortunes. Clearly, drastic cuts have to be made – but who will bear them?

The answer has always been pretty obvious, but it seems that “De Nile” is not just a river in Egypt, somehow it also flows through Flanders. Opel’s factory located in the harbor area in northern Antwerp was always the leading candidate to draw the short straw and face closure as part of any attempt to reorganize the company. The leading negotiator for General Motors – one John Smith – openly said as much: “In our plans Opel Antwerp is superfluous.” Nonetheless, it’s amusing to read in coverage of the new Magna deal in the Flemish business newspaper De Tijd about the refusal of many parties still to accept that reality. After all, points out Luc van Grinsven, spokesman for the ACV union that represents most of the plant’s workers, that’s only a GM official saying “superfluous,” not anyone representing Magna, i.e. the actual new owners. “The exact consequences of the take-over are not yet clear,” claims Van Grinsven. “But GM after the take-over has no more authority.” And Flemish regional president Kris Peeters is still clinging to a letter he received from Magna at the end of July, assuring him that the company intended to investigate further what possibilities there may be for the future of the plant.

Ironically, coverage in the general-interest daily De Morgen is more straightforward: Death-struggle of Opel Antwerp begins. First sentence: “The Opel factory in Antwerp will surely close.” For Magna has made it clear that it will need to eliminate some 10,000 of the 50,000 total European jobs that the company provides, and in this light all of Antwerp’s 2,600 seem doomed.

Back in De Tijd, commentator Jean Vanempten is also more ready to throw in the towel for Antwerp than his (uncredited) reporter-colleague (Too fatalistic). Of course Opel Amsterdam could never survive, it was easy to tell. Everybody knows that production overcapacity has to be cut, and the Antwerp plant is the concern’s smallest. Plus, it was never even assigned any new model of car to start producing; apparently the facility’s managers were lately frantically going around the company’s various offices in search of a new model to produce.

Vanempten is also ready to start assigning blame for this economic disaster (in which he claims up to 5,000 jobs will be lost, from the direct and indirect economic effects). His main target is the Flemish regional government, which he claims was ineffective throughout the negotiations about Opel’s future:

At no single moment was the Flemish government taken serious by any of the parties in this dossier. The excursions to the US were mainly good for the eyes of its own electorate. For in the run-up to the Flemish election on 7 June it was naturally important to show oneself as concerned and give the appearance of efficacy.

Well, that Flemish government did also offer €500 million in support to that Antwerp plant if Opel would keep it open. But here we simply have yet another case of wishful thinking: the German government pledged €4.5 billion. And it turns out that Magna plans to keep all four German plants operating. Coincidence?

Admittedly, under the EU that sort of bidding-to-keep jobs is something that simply is not supposed to happen. But these remain exceptional economic times. A follow-up article in De Tijd reports on Flemish president Peeter’s visit today to EU Industry commissioner Günter Verheugen, of which Peeters said to the press “I had more than [just] the impression that Commissioner Verheugen shares our position that simple economic parameters should be decisive. The Comission will not allow political parameters to be decisive.” But it’s quite possible that this is just the latest instance of Flemish wishful thinking.

UPDATE: OK, you wanted definitive word from a Magna spokesperson? Here you are: the leading Flemish newspaper De Standaard reports that no less than Magna chief Siegried Wolf announced – in a speech at the Frankfurt Autoshow, which opens its doors tomorrow, 17 September – that his consortium has in mind closing but one plant as it takes over Opel, and that is the one in Antwerp. In total, some 10,500 Europan jobs will have to disappear, so that means in Germany, too, and he expects the car company to return to profitability by 2015.

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