- Title: UK raises alarm over threat to Vauxhall from GM-Peugeot deal
- Date: 15th February 2017
- Summary: LONDON, ENGLAND, UK (FEBRUARY 15, 2017) (REUTERS) (SOUNDBITE) (English) PETER DIXON, GLOBAL ECONOMIST, COMMERZBANK, SAYING: "Whether it's such a good deal for the other European car makers is I think a moot point. Because after all it means that, say Peugeot, as the potential buyer would have to turn around the business which hasn't done particularly well of late. And of course it will mean that we will have to see some form of consolidation. And given that Opel are particularly strong in the German market, that could mean significant labour unrest problems in that particular segment. So I think it's going to be a very difficult deal to actually make work, given that GM haven't managed to do so for so many years."
- Embargoed: 1st March 2017 17:17
- Keywords: Unite McCluskey Peugeot GM Vauxhall Opel deal UK takeover PSA
- Location: LONDON, ENGLAND, UK / LUTON, BEDFORDSHIRE, ENGLAND
- City: LONDON, ENGLAND, UK / LUTON, BEDFORDSHIRE, ENGLAND
- Country: United Kingdom
- Topics: Company News Markets,Economic Events
- Reuters ID: LVA00363MT7D9
- Aspect Ratio: 16:9
- Story Text: Britain and its leading union expressed concerns on Wednesday (February 15) at a plan by General Motors to sell its European operations to France's PSA Group in a deal that could put GM's Vauxhall operations in England at risk after Brexit.
Britain's largely foreign-owned car industry has thrived in recent years, but the vote to leave the European Union has cast doubt on future growth by raising the prospect of tariffs which would make UK plants less competitive.
Prime Minister Theresa May's government has already been forced to pull a deal together to persuade Nissan to keep investing in Britain, saying it would counter any loss of competitiveness caused by Brexit.
On Tuesday the news that GM had entered into talks with France's PSA over a deal to merge its loss-making Opel and Vauxhall brands with the French group's Peugeot, Citroen and DS names raised fears that the British Vauxhall brand could look vulnerable if an enlarged group needs to cut costs.
"Peugeot, as the potential buyer, would have to turn around the business which hasn't done particularly well of late. And of course it will mean that we will have to see some form of consolidation," Commerzbank Global Economist Peter Dixon said.
Britain's car industry, which ships more than half of its exports to the other 27 countries in the EU, had lobbied hard against Brexit.
Since the vote last June, Prime Minister May has said that Britain will leave the EU single market, which guarantees unfettered trade on the continent, but suggested that certain industries may be able to retain elements of free trade.
Vauxhall employs around 4,500 staff in two plants near Liverpool and Luton, north of London, and supports other jobs through supply chain and retail links.
The Unite workers' union said the president of GM had given a private assurance last year that there would be no surprises in terms of GM's plants in Britain, and that these commitments had not been upheld.
"The government needs to make it clear that we're not prepared, in the event that Peugeot buy Vauxhall and Opel, we're not prepared to accept a single job loss here in Britain," Unite General Secretary Len McCluskey said.
McCluskey met Business Minister Clark on Wednesday to discuss the potential impact on Vauxhall and said he had urged the government to give the same assurances it had given to Nissan to other carmakers.
"I suppose in a sense this is a test for the government's industrial strategy. Is it genuine? If it is, then we have to make sure we secure the automotive sector. It's one of the bright jewels within manufacturing over the past few years and we can't afford any movement away from that," he said. - Copyright Holder: REUTERS
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