Call to protect United Kingdom plants affected by Vauxhall sale to PSA Group

The combined group sold 4.3 million vehicles last year

General Motors is set to announce on Monday it will sell Vauxhall and Opel to the PSA Group, which makes Peugeot and Citroen models.

Equally important, a deal will have to be presented on the future of a near-$10-billion Opel pensions deficit and demands by GM that the brand be barred from competing overseas under PSA ownership against General Motors' own Chevrolet lineup. The two companies had been bickering about who should be responsible for footing the bill.

Vauxhall employs around 5,000 people in Britain.

Opel has failed to emulate Ford or PSA in reducing overcapacity at its factories despite closing a plant in the western German city of Bochum, with the loss of 3,000 jobs, in 2014.

"PSA's ambition is to make the cooperation and the quality of relations with employee representatives a competitive advantage and a key factor in the success of the company", Tavares said in a statement on February 21.

"Opel wasn't allowed to do that, which explains its underperformance since 2005".


One stumbling block has been an estimated £1bn hole in Vauxhall's £2.6bn pension scheme but industry sources claim GM could swallow the cost in order to free itself from loss-making European operations. "Opel was reined in too much by GM", he added.

One of the key negotiating points is how PSA can achieve about 2 billion euros (S$2.972 billion) in savings from a deal, said one of the people.

United Kingdom business minister, Greg Clark, said that his meeting with Tavares was constructive and reassuring.

Last week, chief executive of PSA Group, Carlos Tavares, reassured British unions and the government that production at Vauxhall plants in the United Kingdom will be guaranteed until at least 2021 if a takeover by the Peugeot-maker owner goes ahead.

PSA Chairman Carlos Tavares said in February that he hopes to create a "European auto champion" with the combination and pledged to work with governments and unions that are anxious about job cuts. Other complex questions to resolve include licensing fees for technology used in Opel cars and plans to cut production capacity. "There are market segments where Opel isn't very strong, like SUVs", Mr Staudenmayer said.

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