General Motors Company (GM): Will It Pay Big to Close This Factory?

After months of haggling, GM and the union came up with a compromise plan that involved waiting until the end of 2016 to close Bochum.

That plan was approved by workers at three of the four factories last month – but not by those at Bochum, who thought they could squeeze GM for a better deal. But General Motors Company (NYSE:GM) was done playing around: The company immediately announced that negotiations were over and Bochum would close next year.

I said at the time that this could end up being an expensive closure for GM. Ranier Einenkel, chief of the Bochum factory’s works council, has threatened a huge legal battle to hold up the closure and push for big severance payments, in hopes of making Bochum’s closure “the most expensive plant closure of all times.”

He has even threatened to destroy Opel’s public image and thus drive the company into the ground.

Of course, some of that is labor leader bombast. But it’s clear that Bochum’s union local has the power to give GM a very expensive headache. Short of throwing its Opel subsidiary into bankruptcy – an option that has surely occurred to GM CEO Dan Akerson more than once, but that would come with headaches of its own – is there anything General Motors Company (NYSE:GM) can do other than settle quickly and cough up a severance package that could approach a billion dollars?

It doesn’t seem likely. Keep a close eye on this one.

The article Will GM Pay Big to Close This Factory? originally appeared on Fool.com is written by John Rosevear.

Motley Fool contributor John Rosevear owns shares of General Motors and Ford. Follow him on Twitter at @jrosevear. The Motley Fool owns shares of Ford. Motley Fool newsletter services recommend Ford and General Motors.

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