Thousands of Vauxhall jobs under threat
General Motors has agreed to sell its European division Opel, which includes Vauxhall, to the PSA Group, which owns Peugeot and Citroen.
The deal, worth £1.9bn, could put a number of Vauxhall jobs at risk with the PSA Group saying it will make savings of £1.47bn per year by 2026 to increase profits. Most of the cuts are expected by 2020, although PSA Group has guaranteed existing production commitments at Ellesmere Port until 2020 and Luton for a period beyond that. Vauxhall employs 4,500 people at plants in Ellesmere Port and Luton, although that number swells to more than 30,000 when taking into account employees in Vauxhall showrooms and along the supply chain.
GM Europe has not made a profit since 1999 but chairman and chief executive Mary Barra said it would have broken even last year had there not been a sharp drop in the pound following the UK’s decision to leave the EU.
The deal will make PSA Group the second largest carmaker in Europe behind Volkswagen. It will have 24 factories, which many consider to be over-capacity. Carlos Tavares, chairman, 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.’