Too Many Plants, Too Little Sales, Too Late For Opel?

If GM's Opel would have a jobs bank, its accounts would be bulging. Opel has far too much capacity for far too little sales.  The situation at Opel "is more dramatic than thought," writes Germany's Focus Magazin. The magazine got is hands on confidential production plan (most likely leaked by interested parties,) and the numbers are horrific. Capacity ultilization at Opel (Focus Magazine) Ellesmere Port 55% Luton 57% Zaragoza 59% Gliwice 62% Rüsselsheim 65% Eisenach 66% Bochum 77% Average 63% Only 65 percent of the capacity in Rüsselsheim is utilized, the plan says. In some Opel factories there is even less work. Opel wants to build one million cars in 2012, but has capacities for 1.6 million. This is a capacity utilization of 63 percent. If Opel sales continue on their downward trajectory, capacity utilization of 50 percent could become reality. In the business, capacity utilization below 80 percent is a sign for losing money. Opel will have to close at least one plant in Europe, possibly two if the scale effect of the alliance with PSA are supposed to be realized.  Through 2014, plant closures and firings are impossible, due to a contract with the unions. After 2014, plant closures and firings will cost a lot of money.  The unions already threaten to withdraw their restructuring contribution of $340 million per year. "We won't pay for our own funeral," Opel' s works council chief Rainer Einenkel to Focus. Careful, Walter: The restructuring contribution appears to be part of the contract that forbids plant closures … from The Truth About Cars http://www.thetruthaboutcars.com

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