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Opel workers return from the unions meeting at the compnay headquarters in Ruesselsheim, Germany February 17, 2017. (RALPH ORLOWSKI/REUTERS)
Opel workers return from the unions meeting at the compnay headquarters in Ruesselsheim, Germany February 17, 2017. (RALPH ORLOWSKI/REUTERS)

Merkel will try to keep Opel jobs in Germany if GM sells to PSA Add to ...

Germany will do all it can to secure Opel plants and jobs in the country if French auto maker PSA Peugeot Citroën acquires the business from General Motors Co., Chancellor Angela Merkel said on Friday, highlighting the political challenges in sealing a deal.

Her comments came as workers’ representatives at German-headquartered Adam Opel GmbH said they were prepared to hold talks with PSA, as long as commitments to jobs and investments were upheld – some of which extend beyond 2020.

Detroit-based GM said this week its was in talks over a potential deal for PSA to buy its 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 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 co-ordination process under way,” Ms. 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.

Ms. 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 International Inc. to avert mass layoffs among Opel’s German work force. GM pulled the plug on that plan, however, deciding instead to restructure, shutting Opel factories in Belgium and Germany and withdrawing the Saab and Chevrolet brands from sale.

British business minister Greg Clark said he had been told by PSA executives in a meeting on Thursday evening that the French company planned to build on the success of the Vauxhall business if it succeeded in buying Opel.

French Industry Minister Christophe Sirugue also pledged on Friday to stay in daily contact with the German and British governments on the potential deal. The French government owns a 14-per-cent stake in PSA.

For PSA, owner of the Peugeot, Citroen and DS brands, buying Opel would give it a 16.3-per-cent share of Europe’s passenger car market, vaulting it into second place in the region, ahead of France’s Renault SA but behind Germany’s Volkswagen AG.

While economies of scale could help PSA reduce Opel’s long-running losses, many analysts think it would also need to make cost cuts to make the deal work.

But Opel’s labour leaders are in no mood for compromise.

“The fundamental basis for these talks … must be the unequivocal recognition and implementation of existing agreements for all Opel/Vauxhall sites,” the German and European works councils and trade union IG Metall said in a statement on Friday.

Opel chief executive officer Karl-Thomas Neumann tweeted: “A combination with PSA makes fundamental sense. I have great understanding for our staff and customers’ many questions.”

At Opel’s headquarters in Ruesselsheim near Frankfurt, where European works council chairman Wolfgang Schaefer-Klug briefed staff for about 45 minutes on Friday, workers took the latest twist in Opel’s fate in their stride. “Comment allez-vous?” one grinning worker greeted another following the meeting.

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  • General Motors Co
    $33.75
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    (-1.03%)
  • Updated April 21 4:00 PM EDT. Delayed by at least 15 minutes.

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