Labor unions, politicians voice support GM sale of divisions to Peugeot Citroen

Labor unions, politicians voice support GM sale of divisions to Peugeot Citroen

PSA Chairman Carlos Tavares committed to keeping European labor agreements in place.

February 22, 2017

Cleveland, Ohio – General Motors’ bid to sell its money-losing European divisions to Peugeot Citroen picked up steam Tuesday as German labor leaders met with executives and said they were comfortable with the direction of talks and as German Chancellor Angela Merkel expressed support.

GM and PSA Groupe, the parent company of Peugeot Citroen, announced last week that they were considering the sale. GM executives tried to sell the Opel and Vauxhall brands in 2009, but the company’s board scuttled the deal as it was undergoing a massive restructuring as part of its federal bailout.

European governments and labor groups could block a deal if they feel it would cost too many jobs, so winning their support could be key to making the deal happen. Government leaders had already voiced some tentative support – European leaders supported the 2009 attempt as well as GM’s European business has been shedding workers for decades – but labor’s ease with the deal was new.

PSA Group Chairman Carlos Tavares met this week with Jörg Hofmann, first chairman of German labor union IG Metall, and Dr. Wolfgang Schäfer-Klug, chairman of the Opel/Vauxhall European Works Council, to discuss the proposed deal.

During the meeting, PSA officials committed to honoring existing labor agreements in European countries, protecting jobs for the term balances of those deals.

Following the meeting, Schäfer-Klug said, “This commitment and the agreement of a further negotiation process provides the basis of further talks with PSA… We are ready to explore further the chances of a potential coming together.”

Tavares added that PSA feels “cooperation and the quality of relations with employee representatives (is) a competitive advantage and a key factor in the success of the company.”

GM and PSA have not yet announced financial terms for a deal, although news reports suggest that a $2 billion deal could be tentatively reached by the end of this week.

PSA officials made similar promised to Merkel to keep jobs in Germany and allow Opel to continue operating as an independent company, protecting headquarters and design operations in the country. PSA officials have said Merkel supports the deal.

Concerns are higher in Great Britain where the Vauxhall division has two plants. Because Great Britain is in the process of leaving the European Union, Tavares’ pledge keep commitments to the GM’s European operations could mean that such promises wouldn’t apply.

Sources: PSA Groupe, Bloomberg News, the Associated Press

Robert Schoenberger is the editor of Today's Motor Vehicles and a contributor to Today's Medical Developments and Aerospace Manufacturing and DesignHe has written about the automotive industry for more than 17 years at The Plain Dealer in Cleveland, Ohio; The Courier-Journal in Louisville, Kentucky; and The Clarion-Ledger in Jackson, Mississippi.