Opel workers protest cuts as PSA's Tavares digs in

Workers demonstrate with a banner that reads: "We are fighting for Opel in Eisenach."

Photo credit: Reuters/Kai Pfaffenbach

FRANKFURT/PARIS -- Hundreds of Opel workers gathered outside the automaker's Eisenach plant in Germany on Tuesday to protest against owner PSA Group's plans to rein in wages in return for new production investments.

The protest underlined the deepening dispute between the French automaker and staff at money-losing Opel, acquired by PSA from General Motors last year. Opel is already cutting thousands of jobs through voluntary departures.

More contentious is the company's demand that its 19,000 German workers give up a 4.3 percent pay raise negotiated nationally by the IG Metall union before it commits to a first production investment at Eisenach, in the eastern state of Thuringia.

"If there were reasonable negotiations ... then we'd be prepared to talk about reasonable concessions," Opel works council chief Wolfgang Schaefer-Klug told reporters. "What we won't do is to waste our good money on this company only to see a gradual exit from Germany."

The protest, attended by an estimated 1,000 workers, coincided with PSA's annual shareholder meeting, where investors approved CEO Carlos Tavares' 2017 pay - including a 1 million-euro ($1.2 million) bonus for the Opel acquisition.

Tavares told shareholders at the meeting near Paris that he was not expecting a swift resolution to the standoff. "It's going to take a few more weeks," he said. "Don't be surprised if it makes a bit more noise. This is a part of what needs to be done to get the company back on the rails."

The group also posted a 42 percent increase in first-quarter revenue on Tuesday, reiterating mid-term goals for Opel-Vauxhall as well as its Peugeot, Citroen and DS brands.

German Chancellor Angela Merkel last week weighed in to demand that Tavares honor commitments to avoid plant closures or forced redundancies that were given before the acquisition.

"I'm very grateful that the Chancellor made clear to the French side that a company in which the French state is involved cannot ignore German labor law," Thuringia state Prime Minister Bodo Ramelow said at the protest.

The French government, whose bpiFrance sovereign wealth fund owns 12.2 percent of PSA, has so far stayed out of the dispute.