GM (NYSE:GM)
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 Friction between unions and management at General Motors Co.'s (GM) troubled European division intensified Tuesday when the unions accused management of negotiating separately with individual plants to win concessions for a turnaround plan that could jeopardize the future of at least one plant in the region.
"This won't work," GM Europe's top labor representative, Wolfgang Schaefer-Klug, told workers at Opel's main plant in Germany. He said solidarity among European workers remains strong.
A spokesman for Opel said talks with the umbrella organization of European workers, the European works council, over future strategy are ongoing. He didn't comment on details.
Late Sunday, GM's European division said it presented the strategy for the upcoming compact-car generation to its labor unions, suggesting a key element of the division's turnaround plan could be finalized soon.
"After finalizing an information and consultation process with [European labor representatives] the company will decide at which plants the next Astra generation will be produced from 2015," Karl-Friedrich Stracke, chief executive of GM's European Opel and Vauxhall brands, said in a statement late statement. The spokesman for Opel referred to previous comments from Stracke that indicated a decision should be reached by summer.
Schaefer-Klug said management is planning to shift production of the Astra model outside Germany. This would safeguard the U.K. plant in Ellesmere Port, but cast doubt over the future utilization of Opel's German plants in Bochum and Ruesselsheim.
The Astra model competes in the high-volume, but fiercely competitive European compact-car segment where many auto makers are struggling to operate profitably. Reaping decent profits with the Astra will be crucial for GM's plan to stop the losses at its European unit.
The plans for future production capacity and utilization rates at individual plants are widely seen as an indicator of possible cutbacks after the expiry at the end of 2014 of the current labor deal, which rules out compulsory lay-offs and plant closures at GM's European unit.
GM's European operations have been struggling for years, racking up about $700 million in losses in 2011 alone. In 2009, GM was close to unloading Opel and its U.K. sister brand Vauxhall, but ultimately decided to keep and restructure the division instead.
On Thursday, GM reported a first-quarter loss of $256 million for its European division compared with a $5 million profit a year earlier. GM's first-quarter profit fell 69% to $1 billion.
-By Christoph Rauwald, Dow Jones Newswires; +49 69 29 725 512; christoph.rauwald@dowjones.com
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