FRANKFURT: Opel, the loss-making German arm of US auto giant General Motors, said it would halt auto production at its Bochum plant in 2016 but pledged to keep it running as a parts distribution center.
“Opel management has today informed the workforce that full vehicle production at the Bochum plant will be discontinued after production of the Zafira model is scheduled to cease in 2016,” the statement said.
Opel had already announced in June that it would stop building Zafira cars in Bochum in 2016.
“The main reasons behind this decision are the dramatic decline in the European car market and the enormous overcapacity in the entire industry,” Opel explained.
Despite “intensive efforts, we have been unable to change this situation.”
On Friday, the works committee had said the decision could mean the entire site might be shut down with the potential loss of up to 3,000 jobs.
But management insisted that would not be the case and that although vehicle production would cease, Bochum would be used as a parts distribution center after that date.
Indeed, in its new function, the plant could even be expanded as part of an initiative to secure existing jobs at Bochum and even create new ones.
“It is our clear intention to safeguard the jobs of a significant number of Opel employees in Bochum, said head of GM Europe Steve Girsky.
“Germany is our most important market and, with around 20,000 employees, the backbone and home of our brand. That will remain true in the future,” said Opel deputy chief Thomas Sedran.
According to the German news agency DPA, “several hundreds” of jobs would be created in the new parts distribution center, but a company spokesman declined to confirm the figure.
“Everything is still being negotiated,” he told AFP.
GM estimates it stands to lose more than $ 1.5 billion (1.2 billion euros) on its European operations this year and wants to steer Opel and its British sister brand Vauxhall back to profit by 2015.
Opel and Vauxhall are heavily dependent on the European market where industry-wide sales fell by 15 percent in the first nine months, according to data published by the European autombile makers’ association.
The German government expressed “great regret” at Opel’s decision to cease vehicle production at Bochum.
“That’s a terrible blow for the people affected and their families, as well as for Bochum as an industrial site,” said government spokesman Georg Streiter.
“The government regards Opel as a key company in the German automobile sector and expects the parent company General Motors to undertake everything to reach a solution that is socially acceptable,” Streiter told a regular news briefing in Berlin.
He said the government welcomed Opel’s intention to retain and expand Bochum into a logistics center.
Opel to cease car production at Bochum plant
Opel to cease car production at Bochum plant
US pump prices surge as Iran war upends global energy supply
- Fuel prices jump over 10 percent as oil prices surge
- Analysts predict further price rises due to market conditions
MARIETTA/NEW YORK : US retail gasoline and diesel prices are soaring as the US-Israel war with Iran constrains oil and fuel exports, which could be a political test for President Donald Trump’s Republican Party ahead of midterm elections in November.
Fuel prices jumped more than 10 percent this week as oil rose above $90 a barrel, its highest in years, adding pain at the pump for consumers already strained by inflation.
Trump on Thursday shrugged off higher gasoline prices in an interview with Reuters, saying “if they rise, they rise.”
The president had vowed to lower energy prices and unleash US oil and gas drilling during his second term, but much of his tenure has been marked by volatility and uncertainty amid shifts in policies like tariffs and geopolitical turmoil.
The US is the world’s largest oil producer. It is a major exporter but also imports millions of barrels a day since it is the world’s largest oil consumer.
As of Friday, the national average prices for regular gasoline stood at $3.32 a gallon, up 11 percent from a week ago and the highest since September 2024, according to data from the motorists association AAA. Diesel was at $4.33, up 15 percent from a week ago, surging to the highest since November 2023.
Midwest, south feel the pinch
US motorists in parts of the Midwest and the South, including states that supported Trump, have seen some of the steepest increases in fuel costs since the conflict in Iran started.
In Georgia, a swing state, average retail gasoline prices rose 40.1 cents a gallon over the past week, according to fuel tracking site GasBuddy.
Andrenna McDaniel, a health care insurance worker in South Fulton, Georgia, said she was surprised to see prices skyrocket overnight.
“They jumped up so quickly,” she said on Friday, adding that she does not agree with the war at all.
McDaniel, a Democrat, said that for now she is only driving for the most important things, and feels lucky that she works from home so she does not have to drive as much as other people do. Georgia voted for Donald Trump in the 2024 election.
Trump voter Richard Soule, 69, a US Air Force veteran and a retired firefighter, said a little pain at the pump is worth Trump’s efforts to protect America.
“When President Trump went in there and bombed out their nuclear, and they just thumbed their nose at it, I believe he did the right thing at the right time,” Soule said on Friday as he filled up his Ford F-150 truck in Marietta, Georgia.
Other states, including Indiana and West Virginia have seen prices rise by 44.3 cents and 43.9 cents, respectively.
Prices may rise further
More pain may be on the way, analysts said, as oil prices continue to trend upward. On Friday, US oil futures settled at $90.90 a barrel, up nearly $10 and the biggest single-day rise since April 2020.
“Given current market conditions, the national average price of gasoline could climb toward $3.50 to $3.70 per gallon in the coming days if oil continues rising and supply disruptions persist,” GasBuddy analyst Patrick De Haan said.
The disruptions in the Middle East and the Strait of Hormuz, a key trade conduit, have boosted demand for US oil abroad, which in turn has driven up prices for domestic refiners too.
“The US has weaned itself off of its dependence on Middle Eastern crude, but obviously Asian refineries, and to a lesser extent, European refineries have not,” Denton Cinquegrana, chief oil analyst with OPIS. “That’s what you’re seeing happen in the spot market, because the demand for US exports rise, and so the price rise.”
Seasonal factors could add further pressure. Gasoline prices typically go up in the spring and peak in the summer due to higher gasoline demand and production of summer-blend gasoline, which is more costly to produce. Diesel fuel saw an even more aggressive jump since Iran began retaliating against US and Israeli strikes, significantly disrupting shipping in the Strait of Hormuz.
Global diesel inventories have remained in tight supply due to heavy demand for heating and power generation during a prolonged winter in the US and other parts of the world and a structural tightness of refining capacity. Sticker prices of everything from food to furniture go up when the cost of diesel goes up, as the fuel is mainly used in freight transportation, manufacturing, agriculture, and global shipping, analysts said.
“In a world where buzzword seems to be ‘affordability’, that is certainly not going to help,” Cinquegrana said.
