21674821 - white vauxhall astra sports tourer, at the vauxhall factory, ellesmere port, england

FRENCH OWNERS OF PEUGEOT AND CITROEN TO BUY VAUXHALL IN CONTROVERSIAL DEAL

The French company that owns Peugeot and Citroen has struck a 2.2bn euro (£1.9bn) deal to buy General Motors’ European unit, including Vauxhall.

GM Europe has not made a profit since 1999 and the deal has raised fears about job losses at Vauxhall. The UK factories at Ellesmere Port and Luton employ about 4,500 people.

With GM’s Opel and Vauxhall operations, PSA Group would become the second largest carmaker in Europe, behind Volkswagen.

In a statement, Carlos Tavares, chairman of PSA’s managing board, said: “We are confident that the Opel/Vauxhall turnaround will significantly accelerate with our support, while respecting the commitments made by GM to the Opel/Vauxhall employees.”

‘Nerve-wracking’ period

One worker at Vauxhall’s Ellesmere Port plant in Cheshire told reporters this morning that they were “still in the dark” about jobs.

Another said: “I think the deal is good for current GM and Vauxhall employees, but is there a future for younger workers after 2021?”

Ahead of the announcement, Len McCluskey, general secretary of Unite, said that Vauxhall staff at plants at Luton and Ellesmere Port had endured a “nerve-wracking” few weeks.

Thousands more workers are involved in Vauxhall’s showrooms and supply chain.

“We will also be urging the government to stay at the table, just as the French and German governments do, to provide full support for our auto workers through this deeply unsettling time,” Mr McCluskey added.

Brexit effect

GM chairman and chief executive Mary Barra said it was a difficult decision to sell Opel and Vauxhall, and insisted the business would have broken even in 2016 had it not been for the UK’s decision to leave the European Union, which caused a sharp drop in the value of the pound.

The former Business Secretary, Sir Vince Cable, said there were doubts about jobs because of the government’s “lack of commitment to the customs union and the single market”.

“Car components have to go backwards and forwards across frontiers and they will acquire tariffs and checks.

“And Vauxhall is particularly is exposed to this, [as] about 80% of its exports are to the European Union.

“And if you’re a hard headed car executive looking at the competitiveness of Britain versus German plants, Britain, I’m afraid, is going to slip down the ranking in future.”

But the BBC’s assistant political editor Norman Smith said government sources are “cautiously optimistic” about the future of car production at Vauxhall.

They have suggested to him that PSA may re-locate some of Peugeot’s production to UK car plants to maximise sales in Britain.

It is understood the Business Secretary Greg Clarke has received assurances from Mr Tavares that he was not interested in closing plants.