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German carmaker Opel, the loss-making arm of US auto giant General Motors, confirmed Wednesday it will phase out auto production at one of its key western German factories in Bochum at the end of 2014.
"The management board of Adam Opel confirms the approval of its plan concerning the Bochum production plant by the supervisory board. The plan is based on the phase-out of vehicle production at the end of 2014," Opel said in a brief statement.
A proposal for keeping Bochum open until the end of 2016 -- in exchange for a wage freeze, the giving up of some fringe benefits and other cost-saving measures -- was rejected by unions and employees last month.
Under a deal worked out by GM at the end of February, Opel had offered to keep car production in Bochum until the end of 2016 after which the plant would be retained as a components and logistics site employing 1,200 people, compared with 3,200 at present.
But workers at the plant rejected the deal, which the IG Metall union described as "too vague".
Opel currently produces its Zafira model in Bochum.
Opel has three other sites in Germany -- in Eisenach in eastern Germany, which builds the Corsa and Adam models; a components factory in Kaiserslautern in the south west; and the core production plant at Ruesselsheim, near Frankfurt.
GM estimates it stands to lose more than $1.5 billion (1.2 billion euros) on its European operations this year and wants to steer Opel and its British sister brand Vauxhall back to profit by 2015.
Opel and Vauxhall are heavily dependent on the European market where industry-wide sales of passenger cars fell 8.2 percent in 2012, according to data published by the European automobile makers' association.
Last week, GM announced it will invest four billion euros in Opel and British sister brand Vauxhall by 2016.