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Auto Industry

Opel plant in Bochum may be shut down by 2015

German carmaker Opel has said its production facility in Bochum may be closed down earlier than currently planned. The GM subsidiary warns that a deal with unions about cutting costs must be sealed to prevent that.

Carmaker Opel of Germany warned on Tuesday it might have to close down its facility in the western German town of Bochum earlier than previously envisaged.

Opel Supervisory Board chief Steve Girsky told employees in a letter than the plant could be shut as early as the end of 2014, should negotiations with trade unions on major restructuring and cost-saving measures not lead to a deal by the end of February. So far, Opel's management had said the Bochum facility would be closed in 2016 only.

"What we need are a lot more cost-cutting moves," Girsky said in the letter. He said there were signs the car market in Europe would keep contracting this year and Opel - being a European division of General Motors (GM) in the US - could not afford any wage hikes as long as the carmaker kept incurring huge losses.

Bleak outlook

Negotiations with employee representatives about Bochum and other Opel plants started last summer, were interrupted at the end of last year and resumed on Tuesday.

Despite major layoffs, the Opel facility in Bochum remains an important regional employer. It has a capacity of 160,000 cars per year.

Currently, the plant produces the Zafira compact and parts for the Opel Astra brand. Bochum now has a workforce of about 3,000, down from some 25,000 employees when the facility was running at full steam.

hg/msh (dapd, dpa, Reuters)