3,000 Vauxhall jobs at risk after PSA & Fiat Chrysler merger


Trade unions representing Vauxhall workers are demanding an urgent meeting with executives at its French parent Groupe PSA after the decision to merge with Fiat Chrysler.

Groupe PSA, the owner of Peugeot, Citröen, Opel and Vauxhall, will combine with Fiat, which also owns Alfa Romeo and Jeep, to form the world’s fourth-largest car manufacturer.

The merged business will employ 400,000 people and generate combined sales of almost €170 billion and profits of more than €11 billion based on 2018 results. Its value will be more than €40 billion based on the market capitalisation yesterday.

PSA employs about 3,000 people in Britain, mostly at Vauxhall’s car factory in Ellesmere Port, Cheshire.

Both companies claimed yesterday that they could achieve annual savings of €3.7 billion without shutting factories, but the tie-up has raised fears of layoffs in Britain, Italy and France.

Analysts believe that such concerns are justified, suggesting that the merged group would struggle to meet its savings targets without cutting jobs. Frank Schwope, an analyst at Nord/LB, the German bank, said: “The merged group will have to make massive savings and probably also close plants.”

Des Quinn, national officer for the Unite union, which represents workers at Vauxhall’s plants, said that he was pressing for a meeting with managers.

“Unite is seeking guarantees at the highest level as to the long-term future of all PSA’s UK sites and its highly skilled, world-class workforce,” he said. “It is essential that such a meeting happens as soon as possible to alleviate the natural and legitimate concerns of the workforce at this time of change and uncertainty.” The 50-50 merger has been approved by the boards of both companies. The groups hope to win approval from regulators and investors to complete the deal within 15 months.

PSA and Fiat said the tie-up would enable them to fund the massive investments required to develop electric and self-driving vehicles while meeting European pollution regulations.

Carlos Tavares, 61, the Portuguese-born chief executive of PSA, who is credited with improving the performances of Vauxhall and Opel, the group’s German brand, will become chief executive of the new business.

John Elkann, 43, head of the Italian Agnelli dynasty that founded Fiat, will become chairman. Mike Manley, 55, Fiat Chrysler’s British chief executive, will stay on although it is not yet clear which post he will be given.

Exor, the Agnelli’s family holding, will be the main shareholder with a 14.5 per cent stake. The Peugeot family, which founded the French carmaker, and the French state’s investment bank will each hold 6.1 per cent.

Dongfeng, PSA’s Chinese partner, was initially due to retain its stake of about 6.1 per cent. It has been persuaded to offload more than 30 million shares to reduce its holding to 4.5 per cent in an attempt to win regulatory approval in the US. As a result it will not have a seat on the board.

Fiat Chrysler and PSA will each appoint five directors. With Mr Tavares set to take the 11th seat on the board, analysts in Paris suggested that the new group would effectively be under French control. Some suggested that the name of the new group, which has yet to be chosen, would show where the boardroom power lies. Mr Manley denied that there would be a struggle over the name, however. “I don’t think it will be a touchy subject,” he said.