Germany encouraged over Opel jobs, but UK union worries

Mon Feb 20, 2017 12:44pm EST
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By Gernot Heller and Costas Pitas

BERLIN/LONDON (Reuters) - Initial talks between the German government and carmakers PSA (PEUP.PA: Quote) and General Motors (GM.N: Quote) have led to some encouraging signs that jobs at Opel factories will be preserved, though no guarantees have been made yet, a top official said on Monday.

In contrast, a source close to Britain's biggest trade union said it was increasingly concerned about the future of Vauxhall plants in England, should Peugeot-maker PSA seal a deal to buy GM's European Opel/Vauxhall arm.

Europe's car industry has been dogged by overcapacity for years, and analysts have said the planned sale of GM's loss making European business to France's PSA is likely to result in some cutbacks.

Two sources close to PSA told Reuters last week that job and plant cuts were part of the tie-up talks, with the two Vauxhall sites in Britain in the front line.

Britain's decision to leave the European Union, which could lead to trade tariffs, could be a factor in the decision, although the country's politicians and unions are lobbying hard.

Of GM Europe's roughly 38,000 staff, around half are in Germany and about 4,500 in Britain.

German Deputy Economy Minister Matthias Machnig said on Monday GM and PSA had so far not given any binding guarantees on German jobs, but that there had been some encouraging signs.

"This is why speculation is premature at this point," Machnig told German television station ARD. He expressed hope that a combination with France's PSA could form the basis of a better future for Opel.   Continued...

Opel presents their new Crossland X SUV in Frankfurt, Germany February 20, 2017.  REUTERS/Ralph Orlowski