Peugeot owner expected to buy Vauxhall and Opel operations
The board of the PSA Group, which makes Peugeot and Citroen, has reportedly agreed to purchase Vauxhall and Opel from General Motors (GM).
An official announcement is expected to be made tomorrow (Monday 6 March), with ministers confident that the deal will secure 4,500 manufacturing jobs and pensions, with no immediate plans for the closure of Vauxhall’s Luton and Ellesmere Port plants.
However, there are concerns for jobs and pensions once existing contracts start to expire in 2021, post-Brexit.
“Here in the UK and across the continent firms are worried about this ‘worst-case scenario’,” commented CBI president, Paul Drechsler this week, with government sources claiming ministers have been seeking assurances for jobs.
Reports suggest that business secretary, Greg Clark, has held phone conversations and face-to-face talks with both GM and PSA Group executives in recent weeks and prime minister, Theresa May, has also raised the matter with the French prime mister and PSA Group chief, Carlos Tavares.
The Ellesmere Port contract for Vauxhall Astra’s is due to end in 2021, with 80% of the factory’s output sold under the continental Opel brand. The Luton plant’s contract for engines and the Vivaro van brand expires in 2024. PSA chief Tavares has said existing contracts will be honoured informing unions he has “never closed a plant”.
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.
Should the deal progress as planned, PSA will overtake Renault-Nissan as Europe’s second-largest car manufacturer behind Volkswagen.