Merkel says to do all she can to secure Opel jobs in Germany

Fri Feb 17, 2017 9:26am EST
 
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By Paul Carrel and Edward Taylor

BERLIN/RUESSELSHEIM, Germany (Reuters) - Germany will do all it can to secure Opel plants and jobs in the country if Peugeot maker PSA buys the General Motors (GM) business, Chancellor Angela Merkel said on Friday, highlighting the political challenges the carmakers face in sealing a deal.

Her comments came as workers' representatives at German-headquartered Opel said they were prepared to hold talks with PSA (PEUP.PA: Quote), as long as commitments to jobs and investments were upheld - some of which extend beyond 2020.

GM (GM.N: Quote) and PSA said this week they were in talks over a potential deal for the French carmaker to buy GM's European arm Opel, sparking concerns in Germany and Britain of job losses. Germany accounts for about half of Opel's 38,000 staff, while 4,500 are in Britain where Opel operates as Vauxhall.

Europe's car industry has been dogged for years by overcapacity and analysts think cuts will be needed for a deal to make sense. Two sources close to PSA told Reuters on Thursday that job and plant cuts were part of the tie-up talks, with the two Vauxhall sites in Britain in the front line.

However, any job losses would be fraught with difficulties, with elections in both Germany and France this year and Britain anxious to prove its departure from the European Union will not lead foreign investors to pull out.

"With Opel, the talks are under way. The government has a coordination process under way," Merkel told reporters after meeting Canadian Prime Minister Justin Trudeau in Berlin.

"We will do everything we can politically to secure jobs and sites in Germany," she added.

Merkel helped broker a deal in 2009 for Opel to receive government guarantees if GM sold a stake in the business to Canadian auto parts supplier Magna MG.TO to avert mass lay-offs among Opel's German workforce. GM ended up pulling the plug on that plan, however, instead restructuring, shutting Opel factories in Belgium and Germany and withdrawing the Saab and Chevrolet brands from sale.   Continued...

 
The logo of German car manufacturer Opel is pictured at the compnay headquarters in Ruesselsheim , Germany February 15, 2017.  REUTERS/Ralph Orlowski