GM ‘wants to offload Vauxhall before the Geneva Motor Show in March’

Time 5:23 pm, February 22, 2017

THE owner of Vauxhall is racing to offload the carmaker to Peugeot before the prestigious Geneva Motor Show next month, as speculation grows that production of the Astra could be shifted to France as part of the deal.

Car Dealer understands via the Press Association that General Motors (GM) and PSA Group are eager to ink a deal within the next two weeks to prevent the proposed tie-up overshadowing their presence at the industry showcase in Switzerland.

It comes amid fresh concerns over the future of Vauxhall’s UK workforce, with analysts predicting the deal will spark the closure of the Ellesmere Port plant and see manufacturing of the Astra moved to France.

GM’s European operations include Vauxhall and Opel, while PSA Group owns Peugeot and Citroen.

Around 1,900 staff manufacture the Vauxhall Astra at Ellesmere Port and a further 1,500 people produce the Vauxhall Vivaro van in Luton.

Analysts at Evercore ISI predicted PSA Group’s swoop for GM’s loss-making European business would trigger the closure of Ellesmere Port, alongside GM’s Eisenach plant in Germany and PSA’s Villaverde plant in Spain.

‘Given the massive overlap of the two businesses, there should be no illusion as to what will need to happen in order to make a business combination work,’ the analysts said.

‘It’s about hard restructuring in Germany, the UK and in Spain, resulting in 5,000 manufacturing job cuts.

‘Instead of continuing production in Ellesmere Port, we would not be surprised if PSA moved Astra production to the Sochaux plant in France.’

PSA chief executive Carlos Tavares is expected to outline the firm’s proposals in talks with Prime Minister Theresa May this week.

The Peugeot boss is also set to meet the leader of Britain’s biggest union, Unite, to discuss the situation.

Speaking at the annual conference of the EEF manufacturers’ organisation, Business Secretary Greg Clark said it was right that the Government was ‘active and engaged’ with the companies given the importance of Vauxhall to the UK.

He said he had held already discussions with General Motors and PSA and that talks were continuing.

MORE: PSA’s undersused factories could swallow up UK production

MORE: Comment: Could Vauxhall kill off the Peugeot brand?

MORE: Vauxhall workforce highly valued, minister told at talks on takeover plan

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Dave Brown's avatar

Dave, production editor on Car Dealer Magazine, is a journalist with more than 30 years' experience in the worlds of newspapers, magazines and public relations.

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