Vauxhall owner’s £40bn Fiat Chrysler merger ‘could be signed by Christmas’

Vauxhall employs 900 people assemblng the Astra at Ellesmere Port and its French owner PSA is on the verge of a mega-merger with Fiat Chrysler. Tony McDonough reports

Vauxhall Astra
Vauxhall Astra being assembled at the company’s Ellesmere Port plant

 

A £40bn merger between auto giants PSA and Fiat Chrysler could be signed as early as December offering more clarity on the future of the Vauxhall car assembly plant at Ellesmere Port.

Late last week both companies agreed in principle to merge, creating the world’s fourth-largest automotive company. Based in France, PSA is the owner of the Vauxhall brand, as well as Peugeot and Citroen. Fiat Chrysler is behind behind Jeep, Alfa Romeo, and Maserati.

The deal will add to the uncertainty over the future of the Ellesmere Port factory, which assemble around 140,000 Astras every year. Significant cost-cutting has seen the site lose around 1,000 workers over the past couple of years.

Workers at the plant are hoping PSA will agree to the next generation Astra being built there and securing its future for several years. But the company has yet to make a decision amid a challenging car market and uncertainty over Brexit.

Leaders of the Unite union, which represents the the workers at Ellesmere Port and around a further 2,000 at Luton, are seeking urgent talks with PSA amid fears for the future of the UK operations.

And automotive expert, Prof David Bailey from the Birmingham Business School, says the union is right to be concerned as he believes a merger “isn’t going to be achievable without plant closures and significant job cuts”.

Over the weekend, both Italy’s La Stampa newspaper and financial and business news service, Reuters, have quoted sources close to the deal saying an agreement could be signed by early December or certainly before Christmas.

And a separate report in the The Times claims the enlarged business would seek cost savings of around £4bn, putting assembly plant closures on the agenda. Rationale for the merger is the increasingly tough European car sales market and the need to invest heavily in electric vehicles.

Late last week, Unite national officer Des Quinn said: “Unite is seeking an urgent high level meeting with PSA over merger talks with Fiat Chrysler. Merger talks combined with Brexit uncertainty is deeply unsettling for Vauxhall’s UK workforce which is one of the most efficient in Europe.

“The fact remains, merger or not, if PSA wants to use a great British brand like Vauxhall to sell cars and vans in the UK, then it has to make them here in the UK.”

And Prof Bailey told BBC News: “I have a real fear that if this merger goes ahead the likes of Ellesmere Port, which is a very efficient plant, could be sacrificed to get the sort of savings the company is looking for, especially in all the uncertainty over Brexit.”

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