Belfast Telegraph

PSA Group plays down plant closure fears over deal for GM's European operations

French car giant PSA Group has sought to play down fears of plant closures after confirming it is to buy the European operations of General Motors, including Vauxhall in the UK, for £1.9 billion.

The announcement ends weeks of speculation about the deal and its impact on thousands of jobs at Vauxhall plants in Ellesmere Port and Luton, as well as in supply companies.

Unite leader Len McCluskey said workers had endured a "nerve-racking" few weeks and needed assurances over the long-term future of the factories.

Carlos Tavares, chairman of the managing board of PSA, said employees at Vauxhall, and Opel in Germany, would be given a chance to reach the necessary "benchmark" of efficiency.

He told a press conference in Paris: "We do not need to shut down plants.

"We believe we need to trust the talents of people. They always come up with ideas and solutions we could not imagine.

"Shutting down plants is rather simplistic."

He said PSA had improved the efficiency of its Peugeot and Citroen models in the last few years without closing any plants.

Business Secretary Greg Clark said: "Vauxhall has a long history of success in this country and we are determined to see that continue.

"The Government welcomes the assurance by PSA that they will respect the commitments made by GM to Vauxhall's employees and pensioners.

"We will continue to engage and work with PSA in the weeks and months ahead to ensure these assurances are kept and will build on the success of both sites for the long term.

"The Prime Minister and I have been in close contact with the PSA Group and General Motors and they have been clear this deal is an opportunity to grow the Vauxhall brand, building on their existing strengths and commitments.

"I have set out the Government's determination to make the UK one of the world's most attractive locations for innovative future vehicle technology, including electric vehicles and battery technology."

PSA will now become the second-largest automotive company in Europe, with a 17% market share.

Vauxhall makes Astra cars in Ellesmere Port and Vivaro vans in Luton, with commitments running for the next few years.

Unions are hoping for new models to be announced to help secure the long-term future of the plants.

Mr Tavares said the deal was a "win-win" for PSA and GM, saying his company was committed to the "iconic" Vauxhall and Opel brands.

He said the workers had to build a sustainable future for themselves based on performance.

Mary Barra, chairman and chief executive of GM, said the deal would put Vauxhall and Opel on a "strong footing" for the future.

She singled out the Astra as one of the company's most "exciting" models.

Commenting on the deal, she said: "This was a difficult decision for GM but we are united in our belief that it is the right one for our employees and customers."

PSA said the deal will bring "significant synergies", such as bringing engineering teams together, as well as savings on research and development.

A Downing Street spokesman said Prime Minister Theresa May and the Business Secretary spoke to Ms Barra on Sunday.

"The Prime Minister set out to Ms Barra the importance of the Vauxhall brand to the UK and reiterated her desire for the jobs at both plants to be secured for the long term.

"Ms Barra made clear that Vauxhall would remain a British brand and that the deal would recognise and respect all agreements regarding the workforce.

"Both the Prime Minister and Ms Barra expressed their confidence that the deal had the potential to strengthen the Vauxhall brand and allow for further growth, supported by the Government's Industrial Strategy and the continued strength of the automotive sector in the UK," he said.

Mrs May's official spokesman insisted that no specific assurances had been given to Peugeot to secure the future of the UK plants.

The PM had made clear to the company that she wanted the "long history of success" at Vauxhall to continue in this country, said the spokesman.

But he added: "In terms of specific assurances - none sought, none given.

"We have a stated position that we will ensure the competitiveness of this country when it comes to the supply chain, research and development and trade."

Labour's shadow business secretary Rebecca Long-Bailey asked an urgent question in the Commons on the takeover as she demanded assurances from the Government that PSA will fulfil pension commitments to Vauxhall workers.

She said the Government had "little power" to ensure corporate takeovers are in the public interest as she called for the law to be broadened to allow ministers to intervene in more areas.

Finally, Ms Long-Bailey asked whether the Government had offered Brexit reassurances to PSA.

She said: "We welcomed Nissan's decision to remain in the UK as a result of assurances provided by this Government. Has PSA been offered the same deal?"

Speaking in the Commons, Mr Clark said the Government had received an "absolute commitment" from PSA that "no pensioner, current or prospective, will be worse off in any way".

He did not refer specifically to Nissan but instead said the UK's automotive sector has been a "great success" and key to that has been co-operation between the sector and the Government, which he said he hoped PSA would continue with.

Later in the Commons Mr Clark said the sale was linked to a wider restructuring of General Motors rather than Brexit.

When asked whether all automotive companies would get the same deal as Nissan, he added: "We've said that by being part of the UK automotive sector, all of the benefits of that in terms of research and development, in terms of trading, in terms of the expansion we see through the industrial strategy of the supply chain, will be available to all such companies."

He added: "The fact that plants are going to be judged, as they tend to be in the automotive sector for new models, on the basis of their competitive efficiency is a strength for us in this country, because our automotive plants are the strongest in the world."

Weekly Business Digest Newsletter

This week's business news headlines, directly to your inbox every Tuesday.