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Vauxhall and Opel sold to Peugeot-Citroen in €2.2bn deal - business live Vauxhall and Opel sold to Peugeot-Citroen in €2.2bn deal - business live
(35 minutes later)
9.16am GMT
09:16
PSA: Hard Brexit could be 'nice opportunity'
Finally, PSA gets a question about Britain’s exit from the European Union....
Q: What impact will Brexit have on this deal?
Carlos Tavares says that no-one knows how Brexit is going to unfold, but the key issue is the trade relationships that Britain has with Europe.
If you think deeply about the two scenarios -either it’s hard or soft.
If it’s a soft Brexit, then the focus is simply on performance - being competitive in the UK versus other countries. In that set-up, the cheaper pound could boost competitiveness.
If it is a hard Brexit - it will be “a very nice opportunity” to source more car parts from inside the UK, Tavares continues.
That would allow Vauxhall to record more of its costs in sterling, bringing them in line with revenues.
This means that the UK supplier base needs to be developed....something that the UK government “totally understands”, Tavares says.
9.07am GMT
09:07
PSA promises to respect workers' deals
Journalists in Paris are pressing Peugeot-Citreon about the fears of job cuts.
Q: What guarantees can PSA give to workers at Opel and Vauxhall?
Carlos Tavares promises that all existing agreements with unions at the two car companies will be honoured.
This is not tactical, this is ethics. If there is a deal, we will respect it.
But what about the future, when those agreements expire?
Tavares repeats his line about giving workers a chance to improve efficiencies.
Q: Can you achieve the planned efficiency savings without cutting staff?
Tavares says the targets aren’t based on cutting jobs.
Instead, it is based on allowing “talented and creative” staff to show their potential.
We will offer workers a European benchmark which they can compare themselves to, Tavares adds.
9.00am GMT
09:00
PSA: Everyone will get a chance
ITV’s Joel Hills gets the microphone.
Q: General Motors is taking a €4.5bn write-down on this deal - isn’t that a sign that it was keen to get out of Europe?
GM’s Mary Barra reiterates that this deal is an “opportunity to strengthen the business” and help GM to stay competitive.
Q: Can Peugeot-Citreon make this deal work without closing factories?
PSA’s Carlos Tavares says that PSA hasn’t shut a factory since he took control of the company.
Shutting down a plant is “rather simplistic”, Tavares continues.
His philosophy is that if you trust people, they will come up with ideas and solutions that you wouldn’t have thought off.
But for that to happen, workforce and managers must believe that they are being given a chance.
Tavares concludes:
Everyone will have a chance to reach the benchmark of efficiency.
As we progress towards that benchmark of efficiency, we do not need to shut down plants.
8.53am GMT
08:53
Q: What does this deal mean for PSA’s existing factories in Spain?
Speaking in French, Carlos Tavares says the Spanish factories have improved their performance in recent years.
PSA has “nothing to hide”, he insists.
Colleagues across the company have “legitimate” questions over whether their jobs are protected, he adds - and he reiterates that the answer is to be as efficient and productive as possible.
8.47am GMT
08:47
PSA: Car workers must perform well
Q: PSA will have 19 factories once this deal goes through. Will you keep them all open?
PSA’s Carlos Taraves doesn’t make any promises -- instead, he signals that car workers hold their future in their own hands.
We believe that people understand that the only thing that protects them is the ability to be at the right level of performance, Taraves says.
As a company that had a “near-death” experience four year ago, we know that “the only thing that protects us is performance”, Taraves adds.
8.45am GMT
08:45
Onto questions...
Q: Did the election of Donald Trump influence GM’s decision to sell its European operations?
Mary Barra replies that that deal is based on business logic, not political issues.
8.40am GMT8.40am GMT
08:4008:40
Now the head of Opel, Karl-Thomas Neumann, speaks, and also sound optimistic abotu the sale to PSA.Now the head of Opel, Karl-Thomas Neumann, speaks, and also sound optimistic abotu the sale to PSA.
He says the deal will create a “European champion”, with Opel remaining a true German brand, and Vauxhall remaining a true British brand.He says the deal will create a “European champion”, with Opel remaining a true German brand, and Vauxhall remaining a true British brand.
8.37am GMT8.37am GMT
08:3708:37
Mary Barra is followed by GM’s president, Dan Ammann.Mary Barra is followed by GM’s president, Dan Ammann.
He says GM found it hard to grow its market share in Europe, despite making improvements at Opel and Vauxhall.He says GM found it hard to grow its market share in Europe, despite making improvements at Opel and Vauxhall.
GM President Dan Ammann says GM decided Opel needed more scale to succeed in Europe due to fragmenting market and increasing regulations.GM President Dan Ammann says GM decided Opel needed more scale to succeed in Europe due to fragmenting market and increasing regulations.
GM President Dan Ammann: Market scale was becoming tough to achieve, even with improvements at Opel, Vauxhall.GM President Dan Ammann: Market scale was becoming tough to achieve, even with improvements at Opel, Vauxhall.
8.33am GMT8.33am GMT
08:3308:33
Shares in PSA Group have jumped by 4% in early trading, as investors give the deal the thumbs-up.Shares in PSA Group have jumped by 4% in early trading, as investors give the deal the thumbs-up.
8.32am GMT8.32am GMT
08:3208:32
More from Mary Barra:More from Mary Barra:
GM CEO Mary Barra says decision to sell Opel "required thougthful and disciplined decision making about the future."GM CEO Mary Barra says decision to sell Opel "required thougthful and disciplined decision making about the future."
Mary Barra says deal a win, win" for everyone. Says @GM Europe would have made money in 2016 were it not for Brexit pic.twitter.com/Sxw2vqIM8IMary Barra says deal a win, win" for everyone. Says @GM Europe would have made money in 2016 were it not for Brexit pic.twitter.com/Sxw2vqIM8I
8.28am GMT8.28am GMT
08:2808:28
GM's Barra: This deal is good for Vauxhall/OpelGM's Barra: This deal is good for Vauxhall/Opel
GM’s Mary Barra is also attending the PSA press conference in Paris. She joins Carlos Tavares on the stage now....GM’s Mary Barra is also attending the PSA press conference in Paris. She joins Carlos Tavares on the stage now....
Carlos Tavares et Mary Barra officialisent vente @Opel à @GroupePSA ce matin au siège parisien du constructeur tricolore pic.twitter.com/yVOjzsBB2CCarlos Tavares et Mary Barra officialisent vente @Opel à @GroupePSA ce matin au siège parisien du constructeur tricolore pic.twitter.com/yVOjzsBB2C
Barra says the deal will put Opel and Vauxhall on a firmer footing for the future, and create a new era for the two companies.Barra says the deal will put Opel and Vauxhall on a firmer footing for the future, and create a new era for the two companies.
She admits that it wasn’t an easy decision, but says GM is convinced that the sale is the right decision for customers, workers and shareholders.She admits that it wasn’t an easy decision, but says GM is convinced that the sale is the right decision for customers, workers and shareholders.
Barra also argues that GM Europe would have hit its goal of breaking even in 2016 “if it wasn’t for Brexit”.Barra also argues that GM Europe would have hit its goal of breaking even in 2016 “if it wasn’t for Brexit”.
#PSA and #GM announcing sale of Opel/Vauxhall to PSA. GM's Mary Barra calls it a win for all three companies.#PSA and #GM announcing sale of Opel/Vauxhall to PSA. GM's Mary Barra calls it a win for all three companies.
UpdatedUpdated
at 8.29am GMTat 8.29am GMT
8.24am GMT8.24am GMT
08:2408:24
PSA press conference underwayPSA press conference underway
PSA’s chairman, Carlos Tavares, tells journalists in Paris that today’s deal will create “create a new European automotive champion” and unleash the full potential of Vauxhall and Opel.PSA’s chairman, Carlos Tavares, tells journalists in Paris that today’s deal will create “create a new European automotive champion” and unleash the full potential of Vauxhall and Opel.
Tavares insists that PSA is committed to both brands.Tavares insists that PSA is committed to both brands.
In conclusion, this deal is a game-changed for PSA, Tavares adds.In conclusion, this deal is a game-changed for PSA, Tavares adds.
8.21am GMT8.21am GMT
08:2108:21
You can also watch the PSA press conference on Periscope, here:You can also watch the PSA press conference on Periscope, here:
🔵 LIVE: @GroupePSA / @GM press conference #Opel #Vauxhall https://t.co/xaF5xDplrT🔵 LIVE: @GroupePSA / @GM press conference #Opel #Vauxhall https://t.co/xaF5xDplrT
8.19am GMT
08:19
Over in Paris, PSA Group is holding a press conference to discuss the Vauxhall/Opel deal.
It’s being streamed live here (in English).
8.13am GMT
08:13
The Vauxhall-Opel sale isn’t the only big deal announced this morning.
Standard Life has just swooped on fellow insurance group Aberdeen Asset Management in an £11bn takeover. Standard Life’s shares have surged by 9% in early trading, while Aberdeen are up 6.5%.
But while the City likes the tie-up, staff at both companies may be fearing for their future, with £200m of cost-cuts planned.
Here’s my colleague Julia Kollewe’s take:
8.01am GMT
08:01
Here’s a bit of UK car history -- the first Vauxhall Viva rolling off the production line at the Ellesmere Port factory, back in 1964.
7.54am GMT
07:54
Politicians in Germany and Britain have been scrambling to protect workers at Opel and Vauxhall, respectively, in anticipation of this morning’s deal.
City analyst Louise Cooper fears that British workers could be vulnerable. She suspects that Paris government, which holds a stake in PSA, won’t want to spare Britain from the cost-cutting.
French govt owns 14% of PSAIf job cuts needed in EU, highly unlikely PSA will cut French or German jobs & leave Brits alone esp #Brexit
Sky’s Darren McCaffrey is also concerned that workers in Luton or Ellesmere Port, in Cheshire, could be hit.
BREAK: Peugeot owner PSA has agreed €2.2bn deal to buy GM Europe's Opel and Vauxhall brands. Could it see jobs losses in the UK?
7.45am GMT
07:45
Labour MP: Glad that uncertainty is over
Labour MP Gavin Shuker, who represents Luton South, has welcomed the end to the uncertainty over Vauxhall’s future.
Shuker also points out that Vauxhall’s factories are more efficient than most of PSA’s other operations -- a reason not to consider closing them....
Glad to see the uncertainty over the PSA/GM deal is now over. Our UK plants are among the most efficient of any in the new company. (1/2)
They deserve a bright future. Now government needs to play its part, delivering a Brexit deal that keeps Vauxhall building in the UK. (2/2)
7.40am GMT
07:40
Here’s the official annoucement:
Opel/Vauxhall to join PSA Group
7.40am GMT
07:40
General Motor’s CEO, Mary Barra, says this deal will help GM to focus on new technologies (probably including self-driving cars?).
“We are reshaping our company and delivering consistent, record results for our owners through disciplined capital allocation to our higher-return investments in our core automotive business and in new technologies that are enabling us to lead the future of personal mobility.
Barra also argues that Opel and Vauxhall will be in “an even stronger position for the long term”.
7.31am GMT
07:31
Peugeot-Citreon: We respect Opel/Vauxhall's workers
PSA’s chairman, Carlos Tavares, is trying to reassure Vauxhall and Opel workers about the future.
Speaking as the deal is announced, Tavaras says:
“We are proud to join forces with Opel/Vauxhall and are deeply committed to continuing to develop this great company and accelerating its turnaround.
We respect all that Opel/Vauxhall’s talented people have achieved as well as the company’s fine brands and strong heritage. We intend to manage PSA and Opel/Vauxhall capitalizing on their respective brand identities. Having already created together winning products for the European market, we know that Opel/Vauxhall is the right partner. We see this as a natural extension of our relationship and are eager to take it to the next level.”
“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.”
But....PSA is also adamant that it will make cost-savings once the deal goes through....
It says:
The transaction will allow substantial economies of scale and synergies in purchasing, manufacturing and R&D. Annual synergies of €1.7 Bn are expected by 2026 – of which a significant part is expected to be delivered by 2020, accelerating Opel/Vauxhall’s turnaround
7.26am GMT
07:26
PSA to buy Vauxhall/Opel in €2.2bn deal
It’s official - General Motors is pulling out of the European car market by selling its Vauxhall and Opel divisions in a €2.2bn (£1.9bn) deal.
The agreement, announced a few minutes ago, will see France’s PSA Group (the firm behind Peugeot and Citroen) take ownership of Germany’s Opel and Britain’s Vauxhall.
It ends weeks of speculation over the future of both car brands, and will make PSA Europe’s second-largest automotive company, with 17% of the market.
But it also means fresh uncertainty for workers at Vauxhall’s two British plants, at Ellesmere Port and Luton, if PSA decides to cut costs.
Details and reaction to follow....
Updated
at 7.46am GMT
7.15am GMT
07:15
The agenda: Vauxhall sale, Aberdeen-Standard Life deal
Good morning, and welcome to our rolling coverage of the world economy, the financial markets, the eurozone and business.
There’s a lot afoot this morning, starting with the car industry, as General Motors seals a deal to sell its Opel and Vauxhall divisions to France’s PSA.
In the UK, two of Scotland’s biggest companies – Standard Life and Aberdeen Asset Management – are on track to merge, creating the second biggest fund manager in Europe.
Germany’s Deutsche Bank is also in focus, after announcing plans to raise €8bn of fresh capital to bolster its balance sheet.
European stock markets are expected to open smoothly, with the FTSE 100 hovering close to last week’s record highs.
Our European opening calls:$FTSE 7365 down 9$DAX 11984 down 43$CAC 4992 down 3$IBEX 9791 down 8$MIB 19639 down 26
City traders will also be preparing for Wednesday’s Budget announcement, with chancellor Philip Hammond expected to announce plans to set aside billions of pounds to cover the impact of Brexit.
We’ll be covering all the main events through the day....