PSA, Opel Labor Leaders Agree to Wage Concessions, Job Guarantees

PSA Group and Germany’s IG Metall labor union have agreed on a package of wage concessions, jobs guarantees and new-product investments for the carmaker’s Opel unit.

The two side agreed to an unspecified “extensive” package of labor concessions through 2023 that will cut costs and increase the competitiveness of Opel facilities in Germany.

PSA says the deal prohibits the company from firing workers. In exchange, IG Metall agreed to cancel wage increases that were to come due in mid-2019 and postpone until after 2023 raises scheduled under the previous labor agreement for 2020.

In return, PSA pledges to make “significant” investments in Opel plants in Eisenach, Kaiserslautern and Russelsheim between now and 2023. The spending will include preparing the Eisenach plant to will employ two shifts to begin making the Grandland X crossover vehicle in mid-2019. The facility will add a hybrid variant of the vehicle in 2020.

PSA also agreed to make Opel’s engineering center in Russelsheim responsible for developing the brand’s next-generation “EP” engine family.

Opel CEO Michael Lohscheller describes the agreement as an important part of PSA’s PACE! plan to “make Opel fit for performance across Europe.”