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21 Feb 2017

Fear in the UK for Vauxhall jobs

Concerns are rising in the United Kingdom about the future of employees of Vauxhall Motors industry which might be a victim of the PSA group and the European branch of General Motors Industry merger. In a time of uncertainty for UK economy a possible shut down of Vauxhall is spreading fears among the workers.

The head of the Unite Union, the biggest trade union in the UK with 1,42 million members, Len McCluskey will be meeting soon with Carlos Tavares, the chief manager of PSA group, in London to try to find out what are the plans for 4.500 workers in the 2 Vauxhall manufacturing plants.

British business minister Greg Clark, when he was asked about the merge, replied that PSA executives give great emphasis to the Vauxhall brand and that they do not want to shut down the plants. The troubling matter, that did not satisfy the unions at all, was that he could not provide evidence or any guarantees because the talks between the two companies are still on. Clark is going to be meeting Tavares next weekend, and this will be a big test for the ability of Britain to retain investments after the Brexit vote.

A spokesman of British Prime minister, Theresa May, reported that May is going to meet Tavares herself and that she is determined to protect the British automotive industry but was not in liberty to disclose any more information. Sources in the government said that May has already shown great interest for the car industry when she provided assurances to Nissan that Brexit will not affect at all the UK operations of the company, especially the important manufacturing plant in Sunderland.

It is not only the United Kingdom that is concerned and worried about the deal between PSA group and GM. PSA group is the one that owns Peugeot and Citroen and through this deal is planning to acquire Opel and Vauxhall. Opel is famous for its car models like Corsa, Astra, Insignia and Vauxhall is selling the same models, just rebadged, in the UK.  There are also rising worries in Germany for the future of the workforce of GM Europe, numbering almost 19.000 workers, currently stationed in the country.

A German newspaper Bild am Sonntag reported that Tavares has promised to protect the four operating plants of GM in Germany. As a government spokesman said in Berlin, Angela Merkel is continuously updated on the talks between the two managements. He also stressed out that there is no chance that someone could create havoc between the UK and Germany as the negotiations go on. The German Deputy Economy minister Matthias Machnig told journalists that any speculation is still premature but he believes that something good could come out from this deal for Opel.

The European part of GM is at loss for more than a decade now and Opel has already been saved once by the Merkel administration in 2009, when Fiat Group tried to buy it. If PSA group manages to finish the deal with GM, it will be having 16% of the European car market, while the biggest rival is the VW group with 24% share of the market. The merge could help the French to reduce their annual costs by 1.9 billion euros since they will be stronger to negotiate better prices with car part providers. Another plus for the French side is that because the pension liabilities of GM Europe are extremely large, GM might finally have to pay PSA group to take over Opel and Vauxhall.