Unions And Government In Bid To Secure British Jobs In Proposed Peugeot Takeover

Unions And Government In Bid To Secure British Jobs In Proposed Peugeot Takeover

Unions and the Government are ramping up efforts to secure thousands of British jobs after Peugeot pointed to "speedy" cost savings as part of its potential takeover of Vauxhall and Opel.

Business Secretary Greg Clark has secured a meeting with PSA Group chief executive Carlos Tavares on Friday, with Unite's general secretary Len McCluskey already scheduled for talks with the car industry boss in London the same day.

The Press Association also understands that Unite attended another meeting on Thursday morning with unions representing General Motors' (GM) staff at the European Works Council in Russelsheim, Germany.

It comes as Mr Tavares told analysts and reporters in Paris that the tie-up would transform the fortunes of Vauxhall and Opel by driving through "significant synergies".

In a presentation on the firm's annual results, Mr Tavares said: "Why do we think we can make this happen and why do we think we can bring a solution?

"Very simply, because if you look at the product plan you can see that you can, in a quite speedy way, implement significant synergies.

"The amount of synergies and the speed at which you can implement those synergies is quite high because we have very many similar products."

Prime Minister Theresa May sought to reassure the French motor industry boss on Wednesday of the Government's continued commitment to supporting the UK car industry, despite Britain leaving the single market as a result of Brexit.

Downing Street said that in Mrs May's call with Mr Tavares, they had discussed their ''shared desire to protect and promote'' the jobs supported by the Vauxhall brand.

The proposed deal has prompted fears over the future of the 3,900 workers at Vauxhall's Ellesmere Port and Luton plants who could be vulnerable in any rationalisation programme by the new owners.

Sources told PA that GM and PSA were eager to ink a deal within the next two weeks to prevent the proposed tie-up overshadowing their presence at the prestigious Geneva Motor Show on March 7.

GM's European operations include Vauxhall and Opel, while PSA Group owns Peugeot and Citroen.

PSA Group announced on Thursday that net income jumped 831 million euros (£702 million) to 1.7 billion euros (£1.4 billion) last year, underscoring the scale of the company's turnaround since it was bailed out by Chinese investors and the French state three years ago.

It also revealed plans to pay out a 48 euro cents dividend per share for the first time since 2011.

Mr Tavares said the company was "now very, very close to becoming the benchmark of the automotive industry in terms of efficiency and effectiveness".

On the proposed deal, he added that there was an opportunity to create a "European car champion" by combining Vauxhall and Opel with PSA.

"If you look at it from the Opel perspective this company needs help. Making red ink every year for 10 years and burning 1 billion of euros (£845 million) of cash every year for 10 years. It is not going to last forever.

"If we do complete this deal, we want to keep this company German with a German brand so it can be complementary to the French brands we already have."

The tie-up would cause GM to exit the UK and Europe, while transforming PSA Group into Europe's second-largest car maker with a 16% share of the market.

Analysts at the Evercore ISI said PSA's swoop for GM's European business would lead to the loss of 5,000 manufacturing jobs and the closure of Ellesmere Port, alongside GM's Eisenach plant in Germany and PSA's Villaverde plant in Spain.

Vauxhall is a major employer in the UK, with around 35,000 staff, including 23,000 in its retail network and 7,000 in its supply chain.

Close

What's Hot