Cost Talks between PSA, Union Stall at Opel’s Eisenach Plant

The outlook for the Opel assembly plant in Eisenach, Germany, is uncertain after talks about labor concessions broke down between the IG Metall union and PSA Group, Reuters reports.

PSA said earlier it might launch an electrified vehicle at the facility. The news service says the model is the Opel Grandland SUV.

But the French has held off on new-product commitments involving all Opel factories in Germany until it gets commitments from the union to help reduce costs. When PSA unveiled its five-year product plan last month, it excluded German facilities.

PSA said at the time it would not commit to further investment there without labor concessions on wages and work rules. IG Metall has demanded that PSA specify its product plans before workers agree to revise their existing contract.

PSA, which acquired Opel from General Motors Co. last August, has been openly critical of the productivity of the brand’s money-losing German operations. CEO Carlos Tavares groused last October that production costs in Germany are at least 50% higher than those in France.