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GM boss Barra to answer concerns over Peugeot deal

The chief executive of General Motors has flown to Germany as the US carmaker seeks to assuage concerns from local managers and unions about job losses amid talks to sell the carmaker’s ailing European business to French rival PSA Peugeot Citroën.

Mary Barra and key lieutenant Dan Ammann arrived at Opel’s headquarters, GM’s subsidiary, on Tuesday morning, while PSA chief executive Carlos Tavares is pushing to meet German chancellor Angela Merkel and unions as early as this week as the two sides move towards a deal.

On Tuesday, the two companies said they were exploring possibilities to deepen their relationship that may involve GM selling its lossmaking Opel unit to PSA.

The suggestion of a deal has led to fears of widespread job cuts as Mr Tavares, a renowned cost cutter, seeks to slash the business’s expenditure in order to make it profitable.

Political reaction in both Germany and the UK has already been strong. Germany’s economy minister Brigitte Zypries expressed anger that unions were not informed of the talks sooner, while the boss of the UK labour union Unite has called on the British government to protect jobs at the country’s two Vauxhall sites.

The British government on Wednesday said it was in high level talks with GM about UK jobs.

Business secretary Greg Clark spoke to Mr Ammann this morning to “discuss the potential acquisition by the PSA Group of Opel including Vauxhall in the UK,” a spokesman for the Department for Business, Energy and Industrial Strategy said.

He added: “The UK’s automotive sector is one of the most productive in the world and we want to see it go from strength to strength. The government will continue to make the case for keeping manufacturing in the UK.”

Germany’s labour minister, Andrea Nahles, said on Wednesday there were talks “at all levels” with Opel, GM and PSA to ensure that Opel’s three plants in Germany remained open in the event of a sale.

“The German government intensively discussed at a cabinet meeting today the issue of Opel,” Ms Nahles said after the cabinet meeting.

Both sides are now battling to contain political anxiety over job losses.

Opel employs 38,000 staff in Europe, though two-thirds of these are in Germany, where manufacturing costs are high.

Mr Tavares is making plans to meet Ms Merkel or her representative as well as Opel’s trade unions, a spokesman for the French car group said on Wednesday.

“[Mr] Tavares is very open, and wants to meet with [Mrs] Merkel and the trade unions of Opel, in a spirit of dialogue . . . Social dialogue is very important within the company,” said the spokesperson.

As well as Germany and the UK, Opel owns plants in Poland, Hungary, Austria and Spain.

One former GM manager previously told the Financial Times that closing Opel’s plant in Spain, its largest production site in Europe, would be likely to spark a “revolution” in the country.

Via FT