German carmaker Opel withholds agreed pay rises: Report

German carmaker Opel is seeking to withhold a 4.3-percent pay rise agreed recently in industry-wide collective bargaining negotiations, the magazine "Wirtschaftswoche" reported on Wednesday.

According to the report, the Ruesselsheim-based carmaker which was recently acquired by the French automotive group PSA is looking for ways to defer higher wage payments as it undergoes a far-reaching process of corporate restructuring.

Back in November 2017, PSA chief executive officer (CEO) Carlos Tavares announced a goal to lower costs at Opel by 1.1 billion euros (1.36 billion U.S. dollars) each year despite committing not to close existing plants or lay-off staff.

"Step by step, we will create a sustainable future for our company in Germany with measures to improve our competitiveness," a statement released by Opel CEO Michael Lohscheller read.

In a document seen by "Wirtschaftwoche" on Wednesday, Opel management has now expressed a desire for a "provisional deferral of the implementation of the collective wage rises." The pay rise, which was only secured after a series of nation-wide "warning strikes", is legally enforceable from April 1 onwards and would be reflected in worker salaries for the first time at the end of the month.

Trade union representatives confirmed the accuracy of the report on Wednesday. Earlier, "Wirtschaftswoche" had reported that Opel was offering employees severance packages of up to 275,000 euros in a bid to reduce headcount at the loss-making company. Under the terms of the Opel acquisition, PSA has vowed maintain the current level of 19,000 staff and production in Germany until the end of 2018.

Opel was unwilling to comment on ongoing negotiations with its workers council and the trade union IG Metall. In order for the carmaker to evade the collective wage rise, Opel would have to successfully negotiate a new separate wage agreement with its own employees. "Wirtschaftswoche" reported that management was hopeful it could secure more contributions on behalf of the employees to the corporate restructuring process.

However, the president of the Opel workers council Wolfgang Schaefer-Klug has emphasised that employees have recently agreed to significant concessions due to Opel's difficult financial situation and would not be willing to accept a further deterioration of their situation. Instead, staff would attempt to secure additional guarantees on the preservation of existing production sites in the negotiations.

(ASIA PACIFIC DAILY)