GM to close Opel plant in 2014 as it moves to cut losses

• Opel management board officially votes to close Bochum%2C Germany%2C plant
• Workers there rejected Opel reorganization agreement%2C including a wage freeze
• Move to trim overcapacity comes as GM has expressed commitment to Opel and investment in new models

Reflecting an apparent new level of decisiveness at General Motors about 15 years of losses by its Adam Opel unit, Opel's management board has officially voted to close its Bochum, Germany, assembly plant by the end of next year.

The plant's fate was sealed last month when its workers rejected an Opel reorganization agreement, including a wage freeze, that would have kept assembly at the plant going until 2016.

An agreement also would have continued other operations and some jobs after that. GM's other German factories have signed onto the broader reorganization plan.

The announcement follows a visit to Germany last week by GM CEO Dan Akerson and the GM board -- including meetings with the German government and with Opel employees.

During those meetings the company said it was committed to keeping Opel going and would invest more than $5 billion in Opel as it rolls out new powertrains and 23 new models through 2016 and develops a new small car platform with GM partner Peugeot.

The closing of the plant, which employs more than 3,000, would be the first major auto plant shutdown in Germany since World War II, according to Bloomberg News. GM had said last year that the plant would continue building the Zafira small van until the end of that product's cycle in 2016. A 2014 closure means that vehicle will have to shift elsewhere.

GM's action brings it into line with the bold action taken by Ford last fall in announcing it would close its Genk, Belgium, plant, as well as two smaller facilities in the U.K. by 2014.

At the time Ford broke from the pack, no other major maker had acted decisively to try to bring production capacity in line with demand. Ford's announcement led to protests and a blockade of the plant by workers.

The closure will not be cheap for GM in the short term. Ford said last month that severance payments for the about 4,000 hourly workers at Genk will cost about $750 million.

But the long-term costs surely would be higher. Even before Europe's current severe economic downtown, carmakers there had more costly production capacity than was needed. And the decline in European car demand has continued with a bottom not yet in sight.

While makers and governments there have resisted cutting overcapacity as was done (albeit with great pain) in the U.S. in the recession. trying to pull the bandage off slowly has not worked to stem losses.