Belfast Telegraph

Assurances sought on UK jobs as GM mulls sale of Vauxhall and Opel to PSA Group

The Government is being urged to seek assurances over British jobs as General Motors (GM) considers a sale of Vauxhall and Opel to Peugeot-owner PSA Group.

Len McCluskey, Unite's general secretary, said it was his priority to speak to GM about what impact the proposed deal would have on Vauxhall's 35,000-strong UK workforce.

PSA Group, which also owns Citroen and DS, is locked in talks over a "potential acquisition" of GM's loss-making European arm, as it explores "strategic initiatives" aimed at boosting profits and cutting costs.

Such a deal would see GM exit UK and Europe, while transforming PSA Group into Europe's second-largest carmaker with a 16% share of the European market.

The US motor giant behind Chevrolet and Cadillac acknowledged talks were taking place, but cautioned that "there can be no assurance that an agreement will be reached."

Vauxhall employs 4,500 staff at plants in Ellesmere Port and Luton, with a further 300 people working in a customer contact centre and 120 at its OnStar headquarters.

Around 23,000 people also work in Vauxhall's retail network, while 7,000 jobs rely on the firm's UK supply chain.

Mr McCluskey said: "My priority now is to speak to General Motors to seek immediate assurances for the UK plants and this loyal workforce.

"I'll also be seeking urgent conversations with the Government because everything must be done to secure our world-class automotive industry."

Mr McCluskey said he was "really disappointed" with how the news of the talks emerged after the GM president gave him personal assurances at the end of last year that there would be no surprises when it came to the future of the UK plants.

"But while this has come out of the blue, we are absolutely determined - UK plants will not be allowed to close," he added.

"I have no intention of allowing GM to walk away from our plants and workers - so my message to the workers at Luton, Ellesmere Port and the tens of thousands in the wider supply chain is this, remain strong and stay united.

"The UK and the EU are among GM's biggest markets - if they think that they can walk away from dedicated workers and loyal consumers without a care, they need to think again."

It comes after Nissan announced in October that it was investing in production of new Qashqai and X-Trail models at Sunderland after receiving Government assurances that EU withdrawal would not affect the plant's competitiveness.

A spokesman for PSA said it has been working with GM on three projects across Europe since 2012, which have delivered "substantial synergies" for both groups.

"Within this framework, General Motors and PSA Group regularly examine additional expansion and cooperation possibilities as well.

"PSA Group confirms that, together with General Motors, it is exploring numerous strategic initiatives aiming at improving its profitability and operational efficiency, including a potential acquisition of Opel.

"There can be no assurance that an agreement will be reached."

PSA Group, which is part owned by the French government and Chinese firm DongFeng Motor, saw its Paris-listed shares jump 5% on news of a potential deal.

Mr McCluskey added: "I also have a message to the UK Government, which is do not sit on the sidelines. Intervene, work with us to create a new future for these plants.

"The French government certainly is not sitting idle - they have a 13% stake in Peugeot and they have given their blessing to this deal.

"We want UK auto workers to feel the same sense that their government is backing them."

GM said last year that it had to raise UK car prices by 2.5% after the EU referendum result caused the British car industry to hit a ''speed bump''.

The Detroit-based firm added that its European arm was on course to break even before the plunge in the value of the pound following the Brexit vote.

Announcing its full-year results last week, it said GM Europe had narrowed losses to 257 million US dollars (£206 million) in the year to the end of December, from a loss of 813 million US dollars (£651 million) the year before.

It also drove down fourth-quarter losses to 246 million US dollars (£197 million), from 298 million US dollars (£238 million) in the three months to December 31 2015.

GM and PSA Group formed an alliance in 2012 in an attempt to make production more efficient by combining purchasing power and larger scale.

But in late 2013, GM announced it was selling its stake, although the two companies continued working on joint vehicle projects.

GM will make Citroen's forthcoming subcompact crossover vehicle beginning later this year at its plant in Zaragoza, Spain.

A spokesman for the Government's Department for Business, Energy and Industrial Strategy (BEIS) said: "Speculation over a merger between GM and Peugeot is a matter for the companies involved.

"The Government remains in close contact with GM as we closely monitor the situation."

The BEIS department added that Business Secretary Greg Clark had spoken to GM president Dan Ammann and raised concerns about a potential acquisition of Opel Vauxhall.