Vauxhall production guaranteed until at least end of decade, PSA tells union

The boss of PSA Group, which is in talks to buy General Motors’ loss-making Opel business in Europe, including Vauxhall, has given assurances to the UK government and Britain’s biggest union that production will be guaranteed until at least 2021.

Carlos Tavares has been on a charm offensive with politicians and unions in the UK and Germany, trying to soothe fears over factory closures and job losses if the takeover goes ahead.

A day after he talked about “speedy” cost savings from the deal, the former Nissan executive headed to London for talks with the UK business minister, Greg Clark, who described the meeting as constructive and reassuring.

Clark said: “We discussed how PSA’s approach is to increase market share and expand production rather than close plants. I was assured that the commitments to the plants would be honoured. There was also recognition that members of the Vauxhall pension fund will be no worse off.”

The pension fund has a deficit of about £1bn.

The Unite leader, Len McCluskey, was also pleased with some of the assurances given after his meeting with Tavares. He said: “It was a relatively positive first meeting in which Mr Tavares gave assurances that current production commitments would be met should the takeover with PSA go ahead.

“It was also heartening to hear that PSA group wants to work with Unite and recognises the skill and efficiency of our members who make the world-class Astra and Vivaro vans.”

The comments suggest production of the current Vauxhall Astra at Ellesmere Port will be guaranteed until 2021, while the Vivaro van in Luton would be guaranteed until 2025. Unite will be seeking to clarify whether previous assurances from Tavares that PSA would respect existing labour agreements indicate that jobs would be safe until 2020.

Tavares has also discussed the Opel acquisition with Theresa May and Angela Merkel, the German chancellor, in separate telephone calls.

McCluskey said he would meet more than 100 Unite shop stewards from Ellesmere Port, Luton and Toddington on Monday to report back on his meeting.

He told reporters: “He [Tavares] talked in terms of not being here to shut plants. That’s not his nature.” The union leader added that there were still a lot of issues to discuss, notably pensions.

Vauxhall’s Ellesmere Port and Luton factories, headquarters and warehouse employ about 4,600 people, with a further 20,000 working in the carmaker’s showrooms; they also support a further 18,000 supply chain job. Vauxhall accounts for 14% of the UK car market.

Opel has about 35,600 employees in Europe, including more than 18,250 in Germany.

Clark said: “Mr Tavares said no deal has been done, discussions continue and he and I agreed to stay in close touch. This is a very important company and workforce which has been successful and we all want it to be just as successful in the future.”

PSA and GM are expected to announce an outline agreement before the Geneva motor show starts on 6 March. The takeover would make PSA Europe’s second biggest carmaker after Volkswagen.

Comments from Tavares on Thursday – his first public remarks on the deal – suggested he would carry out a major restructuring of GM’s Opel operations in Germany and Vauxhall in the UK, similar to the one he oversaw at PSA, which nearly went bankrupt three years ago.

The French carmaker was bailed out by the government and Chinese investors, and bounced back under Tavares, whose cost-cutting efforts included a pay freeze, factory closure and thousands of job cuts. GM’s European car-making operation has been loss-making since 1999.