UPDATE 2-German, UK car plants in balance as Opel board meets


* Plant closures could sour mood of board meeting

* Europe struggles to get grip on overcapacity problems

* Opel's Bochum, Ellesmere Port plants at risk (Adds graphic and story links, more on Peugeot)

By Christiaan Hetzner

FRANKFURT, March 28 (Reuters) - The board of European carmaker Opel met on Wednesday under pressure from U.S. parent General Motors to put an end to years of steep losses, with thousands of workers in Germany and Britain fearing the closure of their plants.

The 20-person board, which includes United Auto Workers boss Bob King for the first time, was scheduled to begin meeting at Opel's headquarters in Ruesselsheim at around 0900 GMT.

The gathering is expected to last into late afternoon. It is not clear whether management will submit a mid-term business plan, which would include plant closures, or focus on less sensitive issues such as the appointment of a new sales chief.

"All signs point towards escalation regardless," said one source close to the board, who said plant closures would be the elephant in the room even if they weren't discussed.

GM Chief Executive Dan Akerson and Opel Chairman Steve Girsky are pushing Opel CEO Karl-Friedrich Stracke to lower the company's breakeven point by shifting production from high-wage countries in western Europe to emerging markets.

Though Opel has said no plants will go before the end of 2014, most expect the 50-year old factory at Bochum in western Germany will be earmarked for closure, along with one at Ellesmere Port, the company's only remaining car plant in the UK, where the brand is known as Vauxhall.

"We're not going to start trembling with fear just because everyone is saying Bochum will be closed," said one source close to Bochum's labour leaders, who was not authorised to speak to the press.

"GM won't announce any plant closure today anyway, since they'd be crazy to give up their trump card. The moment they say which plants are safe, they can no longer play them off against each other in the hopes of extracting concessions."

Economic weakness has hit car sales in Europe, forcing makers to confront high fixed costs and a capacity overhang in the sector that GM Chief Executive Dan Akerson says equates to up to 10 plants.

Opel's own Antwerp plant, Fiat's woefully uneconomical Sicilian plant, and the Trollhattan factory of insolvent carmaker Saab were shut down in recent years, and Mitsubishi is ending car production in its Netherlands facility by year-end.

But Europe still has around 240 plants in 27 countries and political resistance to plant closures has been strong. In the United States, Detroit's big three automakers - GM, Ford and Chrysler, now partnered with Fiat - closed 13 plants between 2008 and 2012.


The works council in Bochum, where the Opel plant employs about 3,100 workers building the Zafira MPV, said a closure would cost 45,000 jobs in total when related services companies and suppliers are added in.

"Opel Bochum's employees are rightly asking themselves, 'What happens after 2014?' Plant closures have not been taken off the negotiating table, just the opposite," a statement from the plant's works council said on Tuesday.

Detlef Holzhauer, a 61-year old teacher from a school in Bochum who visited the plant with his class on Tuesday, said he had witnessed a steady erosion of jobs over decades.

"We've been coming here since 1979," he said. "Back in those days, Opel had 16,000 workers here. That shows the scale of the whole demise, and we've been watching it all happening."

Ellesemere Port employs about 2,100 plus 700 contractors.

Auto analysts expect a wave of plant closures across the continent at other beleaguered carmakers, such as PSA Peugeot Citroen, Renault and Fiat.

Action taken by Opel could be of particular significance for workers at Peugeot, which has agreed a cooperation deal with GM that is predicated upon each restructuring their European operations and sharing platforms to cut costs.

Analysts estimate that Peugeot has an even greater need to close down factories than Opel, in part because GM already reduced its fixed costs by 20 percent during 2010 and 2011 with the closure of the Antwerp plant and downsizing elsewhere.

The French automaker will overhaul its European capacity within "18 months to two years", manufacturing chief Denis Martin said earlier in March.

No announcements are likely on Peugeot factory closures or downsizing until after the May 6 second round of France's presidential election, observers say.

Peugeot unions fear that small car plants in Madrid and Aulnay, north of Paris, are most at risk as the Paris-based company prepares joint vehicle programmes with GM including subcompacts and larger cars.

The automakers have nonetheless maintained that their alliance plans will have no impact on capacity reductions to be carried out separately by each company. GM is acquiring a 7 percent stake in Peugeot as part of a 1 billion euro share sale that closed last week.

Separately, the Opel board is expected to approve Alfred Rieck as new sales chief starting in July, replacing Alain Visser, who accepted a new position in Chevrolet's global marketing department. Until then Bill Parfitt, the former Vauxhall chief, is expected to serve as head of sales in the interim. (Reporting by Christiaan Hetzner, additional reporting by Tom Kaeckenhoff in Bochum and Ben Klayman in Detroit; Editing by Noah Barkin and Will Waterman)



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