It looks like general motors (NYSE: GM) will be its long-term pursuit of German factory closures, earlier than expected.
In troubled gm subsidiary opel in bochum, Germany factory workers vote rejected an agreement that calls for between now and the end of 2016, production of winding. The union leaders had been hoping to squeeze GM to further concessions.
But the joke - or at least, extrusion - top allied: the transaction was rejected, gm officials announced that no further negotiations will take place. Instead of waiting for, until the end of 2016, the factory will be closed, next year, the company said.
Obviously, this was a strategic mistake by trade unions. But it is gm (General Motors) good news?
GM - a huge victory, if it thinks
You may say, "this is just a factory. In addition to the people who work there, who CARES?" But, shut down the factory is a big problem of general motors. In recent years, a wholly owned subsidiary of GM opel, the German carmaker, has lost a lot of money. GM lost $180 million in Europe in 2012, the 13th in the region for three consecutive years of losses.
Chief executive Dan akerson, have made it clear that, this is a must solve all problems, and put forward several of his top aides. On the surface, this is a simple problem, it is familiar to the people who remember a few years ago gm's in trouble too many factories, too many workers, not enough car is for sale.
Over the past few years to increase the seriousness of the problem, serious economic recession in many parts of Europe have crushed the new-car sales. Sales rose to a 17-year low in 2012, most analysts do not expect sales recovered to pre-crisis levels, at least a few years of time - or even longer time.
It's not hard to understand what gm will return to profitability in Europe. To solve the problem, however, has proved a lot harder than you expect. A big reason is: close the factory in Western Europe, especially in Germany, trade unions have a lot of political influence - and there is no factory has shut down since the end of world war ii, this really difficult.
This is why the closure is a big problem in GM - if it did happen, it is not a sure thing. Experience as rivals, recently found that closed the car factory in Europe can be an expensive proposition.
Parting gift of a $750 million workers
Rivals ford motor co. (NYSE: F) - favorite opel European rivals - have their own troubles in Europe. Ford in the region loss of up to $1.75 billion last year. Last autumn, CEO Alan Mulally, ford (Alan Mulally) plans to return to Europe company profitability.
Ford's plan has several parts, but the ability to cut is a key component. Currently, ford plans to close its factories in Europe. Company with the workers reached an agreement, in one of these plants, Genk in Belgium last week. The agreement provides a luxurious package workers leaving the company - an average of $187500 per worker, ford is expected to cost about $750 million in the next few quarters.
This is a big bill, but ford was worth it: reducing capacity is ford's continued profitability is an important part of business recovery plan. As the company's factories and jobs in the United States shed painful restructuring over the past decade, so it must shut down the plant - and other structural changes - in Europe.
Take-away GM observers: shut down bochum, or any other factories in Europe, is still a costly move to GM. Stay tuned.
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