Vauxhall’s future in UK is secure, says business secretary

Vauxhall plants in Luton, Bedfordshire, and Ellesmere Port in Cheshire employ 4,500 staff. Thousands more jobs rely on its UK supply chain.

Powered by article titled “Vauxhall’s future in UK is secure, says business secretary” was written by Julia Kollewe, for The Guardian on Thursday 16th February 2017 15.35 UTC

The UK business secretary has said he has been reassured about the future of General Motors’ Vauxhall production operations in Britain, following a meeting with the US carmaker’s chairman.

Greg Clark sought an urgent meeting with senior GM management after the US car company announced earlier this week it was in talks to sell its European Opel business, including the Vauxhall operations in the UK, to France’s PSA Group, which owns Peugeot and Citroën.

The Vauxhall plants in Luton in Bedfordshire and Ellesmere Port in Cheshire employ 4,500 staff. Thousands more jobs rely on its UK supply chain.

Clark met GM president Dan Ammann and Len McCluskey, general secretary of trade union Unite, in London on Thursday.

Speaking after the meeting, Clark said he had been reassured by the company’s intention to build on the success of its Vauxhall assets. On Thursday evening he was reported to be travelling to Paris for meetings with the French industry minister, Christophe Sirugue, and PSA Group board members.

“There is some way to go in discussions between GM and PSA but I was reassured by GM’s intention, communicated to me, to build on the success of these operations rather than rationalise them,” Clark said in a statement. “We will continue to be in close contact with GM and PSA in the days and weeks ahead.”

However, GM issued a more circumspect statement. “While we have no definitive news to report at this time, we can affirm that our objective in exploring opportunities with PSA Group is to build on the success of Opel Vauxhall and to put the business and the operations in the strongest possible position for the future,” the company said. “We look forward to engaging with our stakeholders as part of these ongoing discussions.”

McCluskey called on the government to ensure that the interests of British workers are looked after in talks between the two companies and ministers in Paris and Berlin.

“My immediate priority now is to understand where Peugeot is now in this process, which is why I am contacting the CEO of the company, Carlos Tavares, to request urgent talks.

“Unite is committed to talking to all the concerned parties in the UK, Germany and France to ensure that the case for the UK workers is pressed at the highest levels.

“But I also say this; our government should demand that whenever the carmakers are meeting with the French and German governments, then the UK government must be at the same table.”

Ammann headed to London after he and GM’s chief executive, Mary Barra, flew to Germany on Wednesday for talks at Opel’s headquarters in Rüsselsheim am Main, near Frankfurt. He will also hold talks with Vauxhall executives in London before returning to the US.

Opel employs about 35,600 people across Europe, including 18,250 in Germany. Berlin has vowed to intervene to protect German jobs if the deal goes ahead.

In a letter to Vauxhall staff sent on Tuesday, Barra wrote: “Our companies are currently exploring numerous strategic initiatives aimed at improving the profitability and operational efficiency of GM and PSA Groupe, including a potential acquisition of Opel Vauxhall by PSA Groupe. Such discussions are ongoing.

“While there can be no assurance of any agreement, any possible transaction would enable PSA Groupe and Opel Vauxhall to leverage their complementary strengths, enhancing their competitive positions for the future in a rapidly changing European market. GM and PSA Groupe would each be able to capitalise fully on their respective strategic priorities. We would seek to ensure any transaction would serve the best interests of all our respective important stakeholders.”

Barra urged workers not to let the talks become a “distraction to the important work you are doing”.

Howard Wheeldon, a veteran analyst in the City, said: “Vauxhall Cars can survive as an assembler of cars in the UK provided that its management, workers and trade unions come together and find an alternative plan.” He said Ellesmere Port could well lose out under PSA ownership and suggested that management and others could look into buying out the plant from GM.

Credit ratings agency Moody’s said the deal would make strategic sense for PSA because it “could release substantial synergies and improve PSA’s market position in Europe where the company continuously lost market share since 2010”.

Lead analyst Falk Frey said: “While we caution that the acquisition would increase further PSA’s reliance on the European market to more than two thirds of group sales from 61% in 2016, diversification within Europe would increase as Opel is strong in markets where PSA is not, ie Germany and the UK.” © Guardian News & Media Limited 2010

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