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UK prime minister to meet PSA Group chief

February 18, 2017

Theresa May has agreed to meet PSA chief executive Carlos Tavares to discuss the French carmaker’s proposals to buy General Motors’ European operation Opel, which includes Vauxhall.

Downing St confirmed the prime minister’s involvement as talks between PSA, the owner of Peugeot and Citroen brands, and GM move towards a conclusion, which is expected in the next week.

Mr Tavares is renowned as a cost cutter, and is expected to slash outgoings at Opel in order to restore it to profitability.

The division last made a profit in 1999, and has racked up losses of more than €8bn since 2010.

Politicians from Germany and the UK have been pushing for guarantees that PSA will protect jobs and plants in their own countries, underlining the concerns that they have about Mr Tavares’s strategy.

Germany is keen to avoid losing manufacturing jobs in an election year, while the UK government is seeking to protect Britain’s booming automotive sector from the potential impacts of leaving the European Union.

Earlier on Saturday, the boss of Britain’s Unite union announced he had secured a meeting with Mr Tavares next week in an effort to secure guarantees over jobs at the company’s two UK plants, Ellesmere Port and Luton.

Unite head Len McCluskey said last week he “urgently” needed to meet Mr Tavares.

On Saturday, Mr McCluskey said: “I am pleased that Carlos Tavares has responded speedily and positively to my request for a meeting to discuss Peugeot’s intentions towards our Vauxhall plants.

“I will be using this meeting to press the case for the UK’s world class facilities and workforce, and ensuring that Mr Tavares and the PSA Group understand fully that Luton, Toddington and Ellesmere Port, and thousands of dedicated UK workers, deserve a strong backer and a positive future.”

The confirmation of the Unite meeting comes the day after the Financial Times revealed that Greg Clark, the UK business secretary, offered PSA comparable assurances to the ones given to Nissan, in an effort to save the plants from closure.

Mr Clark travelled to Paris on Thursday evening for meetings with PSA executives and the French government.

In the meetings, he gave the company promises about government support for electric car development and incentives for suppliers to locate to the area – similar assurances that were offered to Nissan to persuade the Japanese car maker that its Sunderland plant will be shielded from the impact of Brexit.

On his return on Friday morning, Mr Clark told the Financial Times he made sure PSA “had no doubts about the efficiency and importance of the plants and the workforce and that they knew the context of our intention to build on the strengths of our automotive sector”.

Britain’s car plants are heavily exposed to Europe, though Ellesmere Port is unusually vulnerable.

The site, which makes the Astra hatchback car, imports three quarters of its components, while 80 per cent of the vehicles it makes are sold into the EU.

The facility would struggle in the event of a “hard Brexit” that incurs tariffs on exports and disruption to the supply chain, analysts have said.

Via FT