Vauxhall-Peugeot Deal: Germany and UK raise concerns

Automotive - Mohit Shah - Feb 16,2017

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vauxhall peugeot deal germany and uk raise concerns

The governmental authorities of UK and Germany are seeking to defend jobs in the potential collaboration of the Peugeot and Vauxhall carmakers.

The ministers have raised concerns after the maker of Peugeot cars, PSA Group, said it was in talks to purchase General Motors' loss-making European business, Opel.

Presently, Opel manages thousands of workers based in its plants situated in Germany and UK arm Vauxhall.

Business Secretary Greg Clark stated that he would place a "strong case" for the companies to continue manufacturing in the UK.

On Wednesday, it was revealed that Mr. Clark met with union officials for framing the future of Vauxhall. The firm currently employs 4,500 staff at its plants located in Luton and Ellesmere Port.

Moreover, Germany’s government has also indicated its concerns over the possible Vauxhall-Peugeot deal.

According to Economy Minister Brigitte Zypries, Opel and French firm PSA didn’t care to consult ministers or unions before proceeding with the collaboration merger talks.

Chancellor Angela Merkel's spokesman said, it is expected that the German ministers would be soon discussing the deal with the authorities from the French government in order to curb any likely impact on German workers.

A joint venture between GM and PSA is already under operation to produce new SUVs. This agreement was initiated in 2012, when GM acquired a 7pc stake in Peugeot in an attempt to form an alliance in order to stabilize the troubled European car market during that phase.

In the recent past, GM’s European operations have grown too challenging for the popular US-based carmaker. As per reports, General Motors has not made any significant profit in Europe since more than 15 years.

For 2017, the automaker also forecasted a $300m knockout tagged under Brexit-related losses and stated it had ached similar impact due to fall in the value of sterling against the dollar in 2016.