Opel has stretched the patience of its parent General Motors and the ever-watchful financial markets are gazing upon the loss-making brand with a jaundiced eye. On Thursday, Opel management is expected to put forth a plan that provides a path to shrinking billions of dollars in losses while also increasing productivity. At the same time, the European car market is expected to tumble further throughout 2012.
Running plants at full-tilt with three shifts when the chips are down would be counterintuitive for an automaker, but GM is a global manufacturer, so it's expected that those Opel plants might be building Chevrolet models and cars intended for other markets, like Korea.
Layoffs are a particularly sore subject with German labor unions, but you can expect to see moves to shift wages down where possible. Opel may even cut a deal with the unions that avoids layoffs in exchange for wage concessions, and possibly push for a plant closure. Nobody expects the way forward to be easy, with the Germany's IG Metall trade union already having cut wages and agreed to reinvest 11 billion Euros in Opel's current business plan, everyone is expecting to have to swallow hard and make the tough decisions for GM of Europe to save itself.