Opel wage deal to save tens of millions of euros

FRANKFURT, July 5 Reuters reported that German carmaker Adam Opel said on Friday it had agreed a pay deal with its workers which would save the loss-making company a sum in double-digit millions of euros over the next three and a half years.

Under the deal, workers will receive a 3.1 percent salary increase from June 1, 2002, and a further 2.6 percent rise from June 2003, said Opel in a statement.

That is below the four percent pay rise for this year recently agreed by Germany's powerful IG Metall engineering union and the deal ensures there will be no compulsory redundancies until 2005, said Opel. The agreement marks the end of prolonged talks between workers and management at the unit of the world's biggest carmaker General Motors Corp., which aims to return to profit by the end of 2003 by cutting capacity and reducing costs.

Opel said it is still on track to cut 2,500 jobs in 2002.

"Opel has already made important steps to overcome the difficult economic situation," Opel Chief Executive Carl-Peter Forster said in a statement.

"Our programme has the trust of our workers who are ready to give their contribution to the success of the turnaround plan," he added.

The company, which has suffered in recent years from overcapacity and a poor perception among consumers of its cars against a background of declining demand, said the measures would help it to achieve turnaround by the end of 2003. The company aims to reduce its operating loss significantly in 2002 from 2001, when it reported an operating loss of 674 million euros ($656.3 million).