German state premiers write to Opel CEO over plan to close plant

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German state premiers write to Opel CEO over plan to close plant

BERLIN Reuters - The leaders of three German states where Opel has factories wrote to the chief executive of the carmaker's owner Stellantis on Thursday, criticising his lack of communication on plans for Opel which they said were eroding public trust in the company.

Stellantis revealed to the press late last month that Opel's Eisenach plant would close for at least three months due to ongoing global chip shortages.

Last week Stellantis confirmed that it was considering splitting both the Eisenach plant and Opel's largest plant in Ruesselsheim, Germany into separate legal entities. It was reported that discussions were underway by the newspaper Handelsblatt.

The governments of Rhineland-Palatinate, Hesse and Thuringia, the states where Opel's three German plants were located, did not know about either decision before the information being made public, state premiers said in their letter to Stellantis CEO Carlos Tavares, seen by Reuters.

You yourself, Mr Tavares, at the former PSA Group, has assured open and honest communication with representatives of states with Opel locations about your plans for Opel Germany, the letter from Malu Dreyer, Volker Bouffier and Bodo Ramelow, dated Oct. 14, said.

We are turning to you with this letter out of concern, before the trust is lost through further unexpected news from Stellantis' side. Opel's PSA Group purchased Opel in 2017 and implemented deep cuts which led the company to turn a profit for the first time within two decades within a year. Stellantis merged with Fiat Chrysler earlier this year to form PSA, now the world's fourth largest carmaker.

Tavares’ CEO a priori made clear the need to streamline Stellantis' 14 brands and ease a global overcapacity problem, but he has previously promised that his endeavours to turn around Opel would not involve factory closures.

However, last week union officials said they feared that the company would renege on this promise in light of the chip shortage which Tavares has previously said he expects will last well into mid 2022.

Stellantis said that the German state premiers asked Tavares to set a time for a video call with them to discuss Tavares’ plans.