Fear of 3000 jobs at Vauxhall's two UK factories over merger plans




Vauxhall unions have expressed concern that a proposed merger between the parent company Peugeot PGA and Fiat Chrysler could lead to huge job losses.

The two European giants are planning to combine forces to create the world's fourth largest car manufacturer.

However, Vauxhall, which has plants in Ellesmere Port and Luton, fears they could be wiped out during the merger.

  Vauxhall was purchased by Peugeot's PSA group in March 2017 when the French firm acquired General Motors & # 39; European arm which included the iconic British brand and German manufacturer Opel

Vauxhall was purchased by Peugeot's PSA group in March 2017 when the French firm acquired General Motors & # 39; European arm that included the iconic British brand and German manufacturer Opel [19659007] There are fears among trade unions in Vauxhall that the proposed merger between Fiat and Peugeot could lead to huge job losses in the UK, especially if Brexit makes car production in the UK unprofitable ” class=”blkBorder img-share” />

There is fear among the unions in Vauxhall that the proposed the merger between Fiat and Peugeot could lead to huge job losses in the UK, especially if Brexit makes the production of cars in the UK unprofitable

The Peugeot PSA group owns Vauxhall, which has 3000 workers in the UK. These jobs have faced an uncertain future as a result of Brexit with the possibility of the factories moving to Europe.

But the Unite union described the talks as & # 39; deeply troubling & # 39; for Vauxhall's British workers, including 1100 at the Ellesmere port facility in Cheshire, which has long been facing closure.

PSA CEO Carlos Tavares warned in June that it was prepared to pull the plug on the plant – as does the Vauxhall Astra – if Brexit makes it unprofitable.

Unite said it would seek an "urgent, high-level meeting" with the PSA.

United National Officer Des Quinn added: "Merger talks combined with Brexit uncertainty deeply disturbs Vauxhall's British workforce, which is one of the most effective in Europe.

" If PSA wants to use a major British brand like Vauxhall to sell cars and vans in the UK, so it has to do them here in the UK. & # 39;

Analysts have warned that it is likely to be cut in positions.

The board of directors of both companies is open to the deal which will give them total annual sales of £ 146bn with profits of almost £ 9.5bn.

The merger would jump from car manufacturers to the fourth largest in terms of sales behind Volkswagen, Renault-Nissan-Mitsubishi and Toyota, and would combine a number of well-known brands from Alfa Romeo, Jeep and Dodge to Citroen, Opel and Vauxhall.

The boards of both car manufacturers share the conviction that there is compelling logic for a bold and decisive move that will create an industry leader, "the companies said in a joint statement.

FCA is weaker in Europe than PSA, with its French and The company is also lagging behind in bringing electric cars to the market and investing in new forms of mobility.

Meanwhile, PSA is absent from the massive US market, where FCA sells the Chrysler, Jeep, Dodge and Ram brands.

A final agreement could be reached "in the coming weeks," according to the joint statement.

The merger would be achieved through the creation of a parent company in the Netherlands, with the shareholders of PSA and FCA each holding half of the capital. [19659002] The Dutch-based parent company would have a balanced representation, with FCA's John Elkann as chairman and PSA's Carlos Tavares as CEO.

While investors were cheering When car manufacturers first confirmed the calls on Wednesday, the markets on Thursday news had very different effects on the two companies' shares.

PSA fell nearly 13 percent, while Fiat Chrysler jumped more than 8.5 percent despite the Italian-US firm posting losses of £ 150 million in the third quarter.

Daniel Larrouturou of Dom Finance Asset Management Company said that the reaction from PSA shareholders was due to the market value being greater than Fiat Chrysler.

& # 39; With a 50-50 merger, Peugeot technically buys Fiat and offers a bonus to its shareholders, & # 39; he said. "The market takes this into account and accordingly adjusts the share price."

While the companies said a final deal could be reached soon, a successful outcome is not guaranteed.

Fiat Chrysler tried to merge with PSA's French rival Renault earlier this year, but the deal was partially cut off by opposition from the French government, which owns shares in both PSA and Renault.

At the moment, Paris has signaled its support for the new merger plan.

But Minister of Economy Bruno Le Maire warned that we & # 39; ll remain particularly vigilant regarding the industrial footprint in France. & # 39;

Italian Prime Minister Giuseppe Conte said "the important thing is to guarantee employment and investment levels." projected annual savings were calculated without factory closures.

Patrick Michel, an FO trade union representative at a PSA plant in the eastern French city of Sochaux, welcomed and said it would I put the French company on the same level as the global giants Volkwagen and Toyota.

Michel said he hoped it would lead to more work for PSA's French websites, such as producing cleaner engines for Fiat, which is struggling to meet EU emissions targets.

But others expressed fear of working with workers who have grown up against each other, warned Jean-Pierre Mercier, a CGT delegate.

IG Metall, representing workers at Opel's factories in Germany, noted that PSA had guaranteed jobs there until July 2023 when it took over the company.

Unite, representing workers at PSA-owned Vauxhall factories in the UK, said merger talks combined with Brexit uncertainty are deeply disturbing for Vauxhall's UK workforce, which is one of the most efficient in Europe. & # 39 ;

The merger plan comes as the car manufacturing sector – which makes up 5.7 percent of world GDP and eight percent of goods sold – shrunk 1.7 percent last year of vehicles produced, according to the IMF.

An association with a larger company would be advantageous for both companies.

"The FCA may remain as independent as the PSA could, but apparently they lack the scope of some of the competition," said Ian Fletcher, an automotive analyst at IHS Markit's market research firm.



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