GM boss Mary Barra heads to Germany to explain why Opel bosses and unions knew nothing of impending sale to Peugeot.
By Jonathan Braude
A
potential deal for French auto maker PSA Peugeot Citroen SA to buy General
Motors Corp.’s European operations has unleashed panic among politicians
in Germany and Britain and fury and fear among GM workers and their union
representatives.
Unions
in both countries could attempt to block a deal in a show of force, though it
is unclear whether they would ultimately succeed. German federal ministers
announced on Wednesday, Feb. 15, they will hold talks with their French
counterparts, while British Business Secretary Greg Clark has already picked
up the phone to GM president Dan Ammann to express his concern over the fate of
the U.S. company’s two U.K. plants.
And
Ammann was this morning revealed to have joined GM chairman and CEO Mary Barra
on a visit to GM’s European headquarters at Rüsselsheim, Germany, one of three
German plants belonging to GM subsidiary Adam Opel GmbH. Their purpose: to
reassure not only the German workforce and their colleagues at plants in Spain,
Poland and the U.K., but also Opel’s senior management who were reportedly
unaware of negotiations with PSA Group.
The
maneuvering comes barely 24 hours after news of the talks was first leaked to
Reuters news agency, but already has trade unions up in arms. In the U.K.,
where Opel cars are marketed under the Vauxhall brand, the factories at
Ellesmere Port and Luton, England churn out 192,000 vehicles a year and employ
just shy of 4,500 people.
Germany’s
powerful IG Metall union, which represents car industry workers, also has
strong political backing - especially ahead of federal elections later in the
year, which could pose a threat to Chancellor Angela Merkel.
Nevertheless,
a deal is seen making commercial sense.
Analysts
at Barclays plc on Wednesday said they believe a merger of PSA and Opel could
lead to synergies of €1.1 billion to €1.9 billion ($1.16 billion to $2.0
billion). PSA would also be keen to get its hands on GM’s electric vehicle
technology, already available on the Chevrolet Bolt and soon to be rolled out
on its equivalent in Europe the Opel Ampera E.
Barclays
sees a sale to PSA as a rational move for GM. Opel/Vauxhall only has a 6% share
of the European market, where it is the No. 8 auto company. While PSA might not
pay much upfront for a deal, it could potentially agree to continuing licensing
fees for technology.
However,
the Barclays team also pointed out that while PSA has previously talked about
reducing its reliance on the European market, a takeover of Opel would actually
increase its European exposure from 60% to 70%.
Yet
with the prospect of Brexit already seen as a threat to the U.K. car industry,
workers’ representatives are ready to put up a fight. “Let me be clear, we
have no intention of allowing Luton or Ellesmere Port to close,” Len
McCluskey, leader of the Unite union, said in an interview with broadcaster ITV
plc.
The
union wants Vauxhall and other car makers to receive the same - never fully
disclosed - promises the government of Prime Minister Theresa May gave to
Nissan Motor Co., last year that persuaded the Japanese company to invest in
building new models in Britain, despite the Brexit vote.
Meanwhile
German Economics minister Brigitte Zypries, transport minister Alexander
Dobrindt and a representative from Merkel’s office, will hold talks with the
French government about the takeover, according to Merkel’s spokesman Steffen
Siebert. Siebert told journalists that while decisions on a deal were
ultimately a matter for the companies concerned, Merkel’s office would be
following the matter closely.
However,
there has been little reaction from either the French government or the
country’s unions. If Peugeot does acquire the Opel/Vauxhall business, French
workers appear to assume that any job losses and plant closures will be at
money-losing General Motors Europe. Peugeot has recently undergone some painful
restructuring under its Portuguese-born CEO Carlos Tavares and French workers
believe it is time for them to reap the rewards of its turnaround.