Vauxhall is facing the prospect of a merger with French vehicle maker PSA Peugeot Citroen.
The British company’s parent and co-owner of Opel, General Motors, wants to divest itself of its two European operations.
Vauxhall Opel and PSA have for five years collaborated on SUV and LCV projects but now their tie up could become more extensive and would create Europe’s second biggest automotive group.
Vauxhall employ about 35,000 people in the UK, including 4,500 working at its manufacturing plants in Ellesmere Port – including a quarter from North East Wales – and Luton, and at its warehouse and head office in Luton. Its customer centre in Luton employs 300 people, and 120 people work at its On Star headquarters, while another 23,000 work in its retail network and 7,000 in its UK supply chain.
Talks are progressing but by no means certain to result in a merger, although it would create the second biggest automotive group in Europe with 16% of sales if it went ahead. Volkswagen Group is the largest with 23% of sales last year, and well ahead of Renault, which would be knocked into third place by the merger.
The French government holds a 14% stake in PSA, as do the Peugeot family and Chinese firm Dongfeng Motor.
|Last night, in an identical statement to that from the French car-maker, Vauxhall UK said, “Since 2012, General Motors and PSA Group have been implementing an alliance covering, to date, three projects in Europe and generating substantial synergies for the two groups.
“Within this framework, General Motors and PSA Group regularly examine additional expansion and cooperation possibilities, as well. PSA Group and General Motors confirm they are exploring numerous strategic initiatives aiming at improving profitability and operational efficiency, including a potential acquisition of Opel Vauxhall by PSA. There can be no assurance that an agreement will be reached.”
|Leading Welsh automotive economist Prof Garel Rhys has for several years pointed to over-capacity in Europe with too many vehicle assembly plants producing more units than the market really needs, leading to discounting and lower profitability for the brands.
On previous performance in the industry a major player closes a big plant every ten years and the next few years might see one, or more, European PSA/ Vauxhall Opel plants shutting with work transferring to an existing site operated by the companies.
It is far too early to say what would be the outcome for the Vauxhall plants at Ellesmere Port where it makes Astra, and Luton, which is its van centre and home to specialist operations as well as Europe’s On-Star emergency response service.
Behind the scenes, the UK Government is likely to be seeking assurances on jobs and investment in Britain.
In the UK, Unite said it was concerned about the possible outcome of the deal affecting British assembly plants and jobs and in Germany, Economy Minister Brigitte Zypries said it was totally unacceptable that talks took place on French carmaker PSA Group buying General Motors’ European Opel unit without consulting German works councils or local government.
Speaking on the sidelines of a meeting of lawmakers, Zypries she also said that the German government had no information on the talks. GM had a responsibility to ensure that Opel’s innovation centre remained in Germany, the minister added.
Therein lies the issue for unions and governments in both countries as the car makers have said they are discussing a potential sale as part of an initiative aimed at improving profitability and operational efficiency. That implies reductions to remove dual operations.
GM and PSA, the maker of Peugeot, Citroen and DS cars, already share production of SUVs and minivans, a relic of a previous attempt to forge a broader alliance that was unwound in 2013 with the sale of GM’s 7% stake in the French carmaker.
Last night, Reuters reported a deal may be announced in days.