German government holds first talks with PSA over Opel factory futures | News | DW | 21.02.2017
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German government holds first talks with PSA over Opel factory futures

The German government has held initial talks with France's Peugeot (PSA) and US concern General Motors (GM) over the sale of GM's European operations Opel and Vauxhall to PSA. The UK workforce is concerned.

German Deputy Economy Minister Matthias Machnig has said that French auto manufacturer Groupe PSA has not yet given any binding guarantees on German jobs if it buys General Motors (GM)'s European arm, which produces cars under the Opel and Vauxhall brands.

"This is why speculation is premature at this point," Machnig told German television station ARD on Monday. However, he did indicate there were some encouraging signs. 

German newspaper "Bild am Sonntag" had reported that PSA had pledged to continue operating all four of Opel's German production sites.

The German government apparently learned of the PSA-Opel project in the press as neither the French government or the companies told them about the talks, which are reported to be at an advanced stage.

The PSA international group builds automobiles and motorcycles sold under the Peugeot, Citroen and DS Automobiles brands.

Riesentransparent mit der Aufschrift Wir sind Opel Flash-Galerie Bilder der Woche (AP)

Saving jobs

Chancellor Angela Merkel said on Friday that everything politically possible should be done "to ensure that German jobs and plants are safe."

Auto-industry analysts have indicated that jobs cuts following a takeover would be likely to fall on Opel’s six plants in Germany, the UK and Spain, leaving PSA’s 65,000 French car workers relatively unscathed. 

Two-thirds of Opel’s 38,000 staff are based in Germany, which also has the headquarters and a major plant at Rüsselheim near Frankfurt. 

With Germany holding a federal election in September, major job cuts at Opel could affect the chances of Merkel being re-elected for a fourth term.

Germany's economy minister, Brigitte Zypries, plans to discuss the future of General Motors' subsidiary during a visit to Paris on Thursday. 

A ministry spokesman said that Berlin was also in contact with the British government and that the two countries would "not let themselves be played off against each other."

Some industry experts have estimated the sale value of Opel at 3 billion euros ($3.18 billion).

Opel sold around 1.1 million vehicles last year for sales of 16.9 billion euros. PSA sold nearly 3.1 million with sales totaling 54.7 billion euros.

The two companies together would become the second-largest automobile manufacturer in Europe after Germany's Volkswagen (VW). PSA already produces cars in China in its own factories.

UK unions worried

The planned sale of GM's Vauxhall brand is likely to result in cutbacks and job losses in Britain. The two Vauxhall sites in the UK in Luton and Ellesmere Port are reported to be in the front line.

"We are increasingly concerned after reports that German plants are safe," a trade union source told Reuters, adding that the head of the Unite union, Len McCluskey, was likely to meet PSA Chief Executive Carlos Tavares in London on Friday.

Britain's decision to leave the EU - which could lead to trade tariffs - could be a factor in the decision.

Prime Minister Theresa May was due to have a private conversation with Tavares and was determined to protect Britain's car industry, her spokesman said on Monday.

jbh/jm (Reuters, AP, AFP)

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