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Vauxhall sold: Peugeot plays down job cuts and Brexit fears - live updates Vauxhall sold: Peugeot plays down job cuts and Brexit fears - live updates
(35 minutes later)
2.19pm GMT
14:19
Summary: Are Vauxhall-Opel jobs really safe?
Time for a quick recap, with links to the main points.
General Motors has denied that job cuts are inevitable after agreeing the sale of its European operations to PSA Group.
GM is offloading Britain’s Vauxhall and Germany’s Opel to the owner of Peugeot and Citroën, in a €2.2bn deal announced this morning.
PSA has insisted that staff across its business will get a fair chance to show they can hit productivity targets. CEO Carlos Tavares told reporters in Paris that simply shutting factories down was “rather simplistic”.
Tavares also pledged to stick to existing deals with Vauxhall workers, and General Motors CEO Mary Barra also claimed that the deal was a win-win for both sides.
But unions, and individual workers at Vauxhall, are concerned that jobs could be lost - especially if the plants at Ellesmere Port and Luton don’t secure pledges to manufacture new models.
Some industry analysts have also predicted job cuts as PSA looks to consolidate its operations.
The UK government is hopeful that Vauxhall could thrive under PSA’s ownership.
A spokesman for Theresa May told reporters that:
The prime minister set out to Ms Barra the importance of the Vauxhall brand to the UK and reiterated her desire for the jobs at both plants to be secured for the long term.
Ms Barra made clear that Vauxhall would remain a British brand and that the deal would recognise and respect all agreements regarding the workforce.
Both the prime minister and Ms Barra expressed their confidence that the deal had the potential to strengthen the Vauxhall brand and allow for further growth, supported by the government’s Industrial Strategy and the continued strength of the automotive sector in the UK.
(that’s via our Politics Live blog)
Local MPs have also been banging the drum, insisting that Vauxhall plants are already pretty efficient.
Labour’s Justin Madders, who represents Ellesmere Port, says:
There is no doubt that we have some of the most efficient plants in Europe so we have a good tale to tell and we should not underestimate the positive impact on sales that having a U.K. manufacturing base brings.
There should be no doubt that one of the biggest selling points to UK consumers is that Vauxhall is a British brand that supports British jobs. That is something that I know will be stressed to PSA.
2.02pm GMT
14:02
General Motors was adamant this morning that its European business would have broken even last year, if it wasn’t for the Brexit vote.
As this chart show, that didn’t happen -- although GM has been clawing its way back to profitability since the financial crisis....
17 years of GM losses in Europe, all in one chart. Total = $22.5 billion pic.twitter.com/QPkCqnt1mR
2.00pm GMT
14:00
Vauxhall workers at Ellesmere Port arrived for work under the glare of TV cameras and photographers this morning:
1.39pm GMT1.39pm GMT
13:3913:39
Tony Burke, assistant general secretary of the Unite union, doesn’t share John Longworth’s optimism that the car industry will thrive after Brexit.Tony Burke, assistant general secretary of the Unite union, doesn’t share John Longworth’s optimism that the car industry will thrive after Brexit.
If the UK loses membership of the single market, and the customs union, it will also lose the “frictionless” supply chain that allows components to move freely back and forth across the channel, Burke warns.If the UK loses membership of the single market, and the customs union, it will also lose the “frictionless” supply chain that allows components to move freely back and forth across the channel, Burke warns.
He hopes that Theresa May will commit to maintaining membership of the single market and the customs union after Brexit. But if that’s not possible, Unite wants the government will push the ‘reshoring’ of component makers back into the UK.He hopes that Theresa May will commit to maintaining membership of the single market and the customs union after Brexit. But if that’s not possible, Unite wants the government will push the ‘reshoring’ of component makers back into the UK.
Burke also pledges to hold PSA to its promise that factories don’t have to close, following the ‘fantastic’ work done in recent years to make Vauxhall’s plants more efficient.Burke also pledges to hold PSA to its promise that factories don’t have to close, following the ‘fantastic’ work done in recent years to make Vauxhall’s plants more efficient.
1.26pm GMT1.26pm GMT
13:2613:26
John Longworth, who resigned as head of the British Chambers of Commerce last year over his support for Brexit, has denied that the EU referendum vote will hurt the car industry.John Longworth, who resigned as head of the British Chambers of Commerce last year over his support for Brexit, has denied that the EU referendum vote will hurt the car industry.
He tells the World At One that if Britain get a ‘clean break’ from the EU, it could potentially slap import tariffs on cars made in Europe. That would make UK-made Vauxhalls 27% cheaper than comparable models, Longworth argues, boosting domestic demand.He tells the World At One that if Britain get a ‘clean break’ from the EU, it could potentially slap import tariffs on cars made in Europe. That would make UK-made Vauxhalls 27% cheaper than comparable models, Longworth argues, boosting domestic demand.
[Except, of course, the EU would impose reciprocal tariffs, making Vauxhalls much pricier for EU customers].[Except, of course, the EU would impose reciprocal tariffs, making Vauxhalls much pricier for EU customers].
Longworth also argues that Britain can use the money saved on EU budget contributions to make the UK a more attractive place for businesses, perhaps by cutting tax or encouraging investment in R&D.Longworth also argues that Britain can use the money saved on EU budget contributions to make the UK a more attractive place for businesses, perhaps by cutting tax or encouraging investment in R&D.
UpdatedUpdated
at 1.34pm GMTat 1.34pm GMT
1.14pm GMT1.14pm GMT
13:1413:14
Radio 4’s The World At One is looking at the Vauxhall/Opel sale now.Radio 4’s The World At One is looking at the Vauxhall/Opel sale now.
They’ve interviewed several workers at Vauxhall’s Ellesmere Port plant today.They’ve interviewed several workers at Vauxhall’s Ellesmere Port plant today.
One told them:One told them:
I think the deal is a good deal for General Motors and for Vauxhall themselves....but are they [PSA] going to give us a good pension, are they going to take over the General Motors pension scheme that we’ve been paying into for 32 years. Is the money still there?I think the deal is a good deal for General Motors and for Vauxhall themselves....but are they [PSA] going to give us a good pension, are they going to take over the General Motors pension scheme that we’ve been paying into for 32 years. Is the money still there?
Another employee is worried that the Brexit vote means Vauxhall factories are vulnerable if PSA decides to make cuts.Another employee is worried that the Brexit vote means Vauxhall factories are vulnerable if PSA decides to make cuts.
If you have a French factory and a German fatory and they’re all in the EU and one of them’s got to go, what would you say?If you have a French factory and a German fatory and they’re all in the EU and one of them’s got to go, what would you say?
A third predicted a ‘devastating impact” on local people and shops if the Ellesmere Port plant closed.A third predicted a ‘devastating impact” on local people and shops if the Ellesmere Port plant closed.
12.45pm GMT12.45pm GMT
12:4512:45
This isn’t great news for Vauxhall workers....This isn’t great news for Vauxhall workers....
Ex-head of @GM Europe tells @itvnews union "right to be worried" about UK plants. "Commitment to current model is no commitment at all".Ex-head of @GM Europe tells @itvnews union "right to be worried" about UK plants. "Commitment to current model is no commitment at all".
12.39pm GMT12.39pm GMT
12:3912:39
Here’s a photo from this morning’s press conference in Paris, as GM CEO Mary Barra (left) and PSA chairman Carlos Tavares (centre) shook hands on today’s deal. Opel CEO Karl-Thomas Neumann is on the right.Here’s a photo from this morning’s press conference in Paris, as GM CEO Mary Barra (left) and PSA chairman Carlos Tavares (centre) shook hands on today’s deal. Opel CEO Karl-Thomas Neumann is on the right.
12.27pm GMT12.27pm GMT
12:2712:27
Theresa May told GM to protect UK jobsTheresa May told GM to protect UK jobs
Theresa May told General Motors yesterday that UK jobs need to be protected, as the carmaker put the finishing touches to the sale of its European arm.Theresa May told General Motors yesterday that UK jobs need to be protected, as the carmaker put the finishing touches to the sale of its European arm.
The prime minister gave the message to GM CEO Mary Barra, who gave some reassurances in response, according to May’s office.The prime minister gave the message to GM CEO Mary Barra, who gave some reassurances in response, according to May’s office.
Here’s the official statement:Here’s the official statement:
The Prime Minister set out to Ms Barra the importance of the Vauxhall brand to the UK and reiterated her desire for the jobs at both plants to be secured for the long term.The Prime Minister set out to Ms Barra the importance of the Vauxhall brand to the UK and reiterated her desire for the jobs at both plants to be secured for the long term.
Ms Barra made clear that Vauxhall would remain a British brand and that the deal would recognise and respect all agreements regarding the workforce.Ms Barra made clear that Vauxhall would remain a British brand and that the deal would recognise and respect all agreements regarding the workforce.
Despite that reassurance, workers in Ellesmere Port are understandably concerned, as the FT’s Andrew Bounds explains:Despite that reassurance, workers in Ellesmere Port are understandably concerned, as the FT’s Andrew Bounds explains:
Ellesmere Port Unite rep John Cooper talks to the media. He says workers are worried but remains optimistic #Vauxhall pic.twitter.com/Jdou6jW7wdEllesmere Port Unite rep John Cooper talks to the media. He says workers are worried but remains optimistic #Vauxhall pic.twitter.com/Jdou6jW7wd
UpdatedUpdated
at 12.28pm GMTat 12.28pm GMT
12.04pm GMT12.04pm GMT
12:0412:04
Greek economy worse than thoughtGreek economy worse than thought
Back in the eurozone.... Greece has suffered another blow in its battle to emerge from its debt crisis.Back in the eurozone.... Greece has suffered another blow in its battle to emerge from its debt crisis.
New figures show that the Greek economy shrank by 1.2% in the final three months of last year. That’s a very sharp decline, and much worse than the initial estimate of a 0.4% fall in GDP.New figures show that the Greek economy shrank by 1.2% in the final three months of last year. That’s a very sharp decline, and much worse than the initial estimate of a 0.4% fall in GDP.
It’s the worst contraction since 2015, when Greek banks were closed and capital controls imposed as the country came close to leaving the eurozone.It’s the worst contraction since 2015, when Greek banks were closed and capital controls imposed as the country came close to leaving the eurozone.
OUCH. Greek GDP shrank 1.2 per cent in fourth quarter - three times worse than a first estimate of 0.4% Worst quarter since 2015 woes pic.twitter.com/si5UGmBwZROUCH. Greek GDP shrank 1.2 per cent in fourth quarter - three times worse than a first estimate of 0.4% Worst quarter since 2015 woes pic.twitter.com/si5UGmBwZR
The figures undermine hopes that the Greek economy was turning the corner.The figures undermine hopes that the Greek economy was turning the corner.
Indeed, Capital Economics are worried that the EU’s forecast for a growth rebound this year looks rather too optimistic.Indeed, Capital Economics are worried that the EU’s forecast for a growth rebound this year looks rather too optimistic.
Huge downward revison to Q4 #Greek q/q GDP growth from -0.4% to -1.2%. Tsipras, IMF & EU say growth will rebound, surveys suggest otherwise pic.twitter.com/ceZpSbs2RJHuge downward revison to Q4 #Greek q/q GDP growth from -0.4% to -1.2%. Tsipras, IMF & EU say growth will rebound, surveys suggest otherwise pic.twitter.com/ceZpSbs2RJ
Something for the Greek government to ponder at today’s cabinet meeting, where ministers will discuss a new growth strategy....Something for the Greek government to ponder at today’s cabinet meeting, where ministers will discuss a new growth strategy....
11.57am GMT11.57am GMT
11:5711:57
Merging Opel and Vauxhall with Peugeot and Citroen could speed up the creation of new auto technologies.Merging Opel and Vauxhall with Peugeot and Citroen could speed up the creation of new auto technologies.
So argues Matt Freeman, managing consultant at cap hpi consulting,So argues Matt Freeman, managing consultant at cap hpi consulting,
“The greater scale the combined PSA-Opel will have for technology investment will see a step change in vehicle development, which requires not only investment in new powertrain technology, but also the development of a wind-down strategy for internal combustion engines.“The greater scale the combined PSA-Opel will have for technology investment will see a step change in vehicle development, which requires not only investment in new powertrain technology, but also the development of a wind-down strategy for internal combustion engines.
Better scale will also create a better negotiating position when dealing with technology providers like Apple and Microsoft.”Better scale will also create a better negotiating position when dealing with technology providers like Apple and Microsoft.”
11.08am GMT11.08am GMT
11:0811:08
Here’s our news story on the sale of Vauxhall and Opel to PSA Group, and its pledge that job cuts can be avoided:Here’s our news story on the sale of Vauxhall and Opel to PSA Group, and its pledge that job cuts can be avoided:
10.50am GMT
10:50
Vauxhall-Opel deal: What the experts say
Richard Gane, director and automotive sector specialist at supply chain firm Vendigital, says this is “a bad day” for the UK car industry.
He isn’t convinced by PSA’s claim that factories won’t need to close, and believes the UK government needs to offer PSA some ‘inducements’ to protect Ellesmere Port and Luton.
“GM tried to sell Vauxhall-Opel in 2008 and these businesses have been losing money since then so today’s decision to sell is not a surprise. There is great concern however, that once current production runs are completed Vauxhall’s UK-based plants at Ellesmere Port and Luton could close, forcing around 4,500 redundancies.
“While it is not yet definite that the plants will close, there is clearly concern that this could happen because in the case of the Astra, for example, around 75% of components are sourced from the EU and the vast majority of the vehicles made at Ellesmere Port are sold outside the UK. If rumours are correct and PSA Group is planning to combine platforms with Peugeot’s next new model, there would be a strong reason to exit the UK.
Mike Hawes, chief executives of industry body SMMT, is more hopeful:
“The UK is a competitive player in the automotive industry thanks to its rich heritage, record levels of productivity, skilled workforce and strong collaboration with government. The outlook for vehicle production remains positive with investment commitments made over the past few years still delivering growth.
We are hopeful that this deal will provide a positive future for the plants at Luton and Ellesmere Port and the wider supply chain given their inherent advantages. We have been encouraged by the active role government has played reassuring investors of its determination to safeguard our competitiveness despite the uncertainty of Brexit.”
Rebecca Lindland, executive analyst at car valuer Kelley Blue Book, believes selling Opel and Vauxhall makes sense for General Motors.
It allows the US auto giant to focus on emerging markets such as China and India, she says:
“Opel/Vauxhall was a profit losing puzzle no one at GM could solve for decades, and outside forces such as Brexit and an increasingly complex regulatory environment did not help the situation.
Unloading Opel/Vauxhall and the European part of the financing greatly improves GM’s balance sheet, allowing investments in growing markets such as China and India and frees up capital for further expansion into ride and car sharing and autonomous vehicles.
For PSA, the acquisition should provide bargaining power with its suppliers and economies of scale. But production cost savings will be challenged by the powerful labor unions of Germany, the UK and France.
Updated
at 10.54am GMT
10.25am GMT
10:25
The Labour MP for Ellesmere Port, Justin Madders, is meeting business secretary Greg Clark today, in an attempt to secure the car plant’s long-term future under Peugeot-Citroën.
Madders says the Vauxhall sale is an important test of the UK’s industrial strategy.
Now the new owners are in place, clearly work must begin in earnest to put UK production in the best possible position. There have been significant challenges faced in the past but thanks to great work between the union and management at Ellesmere Port those threats have been overcome so we must draw strength from previous success. There is no doubt that we have some of the most efficient plants in Europe so we have a good tale to tell and we should not underestimate the positive impact on sales that having a U.K. manufacturing base brings. There should be no doubt that one of the biggest selling points to UK consumers is that Vauxhall is a British brand that supports British jobs. That is something that I know will be stressed to PSA.
With the country now facing new trading arrangements after Brexit this is the first test of the Government’s commitment to supporting U.K. manufacturing in the new world.
My statement on the Vauxhall takeover: https://t.co/hIOSqHaeZZ
10.12am GMT
10:12
Union: Ellesmere Port needs commitments beyond 2021
The head of the Unite Union, Len McCluskey, has confirmed that PSA has promised to stick to Vauxhall’s existing commitments.
That could reassure workers about their short-term future....
....but McCluskey is also worried that the Ellesmere Port plant, which makes Vauxhall Astras, needs a plan for beyond 2021.
The Press Association has the details:
Len McCluskey told Sky News that the head of the PSA Group, which makes Peugeot, had given reassurances that all commitments would be honoured as part of the deal to buy General Motors’ European operations, which include Vauxhall in Britain.
“There is a cautious optimism,” he said. “But of course the real issue is not the current products, it’s about the new models and we’ll be determined to make certain that the British plants have a long term future.
“The current model in Ellesmere Port goes up to 2020/2021 but really it’s this time next year, maybe the middle of next year, (when) we would need to secure acceptance of a new model there. That’s really the challenge for all of us.
9.49am GMT
09:49
Vauxhall workers in Merseyside are hopeful that the PSA takeover will work out, reports that BBC’s Colletta Smith:
Staff cautiously optimistic about @Peugeot takeover here at Ellesmere Port. "We've survived worse" but the 2,200 jobs only safe until 2021. pic.twitter.com/WDo1ziqRS2
9.46am GMT
09:46
Labour MP Angela Eagle, whose the Merseyside constituency of Wallasey includes many Vauxhall workers, has tweeted about the deal:
The new owners of Vauxhalls Ellesmere Port plant must recognise how efficient it is and safeguard jobs there in long term #PSAsale
Govt must be proactive after PSA GM sale to protect many thousands of jobs at Vauxhall and in the supply chain #PSAsale
9.38am GMT
09:38
Business Secretary Greg Clark has welcomed PSA’s pledge not to rip-up existing deals with Vauxhall’s workers.
He says:
“Vauxhall has a long history of success in this country and we are determined to see that continue.
The Government welcomes the assurance by PSA that they will respect the commitments made by GM to Vauxhall’s employees and pensioners.
The UK government will work with PSA to ensure that it keeps that promise, Clark adds.
The Prime Minister and I have been in close contact with the PSA Group and General Motors and they have been clear this deal is an opportunity to grow the Vauxhall brand, building on their existing strengths and commitments.
9.24am GMT
09:24
The Peugeot-Citroen press conference is now over...here’s some instant reaction from industry experts.
Deal NOT based on job cuts, @GroupePSA Tavares says:"We give people a chance, because they are good. They are talented…they are creative."
GM & PSA execs' talking points on Opel deal:"win-win-win" for all 3 companies"industrial logic" made sensemake Opel a "European champion"
Barra says "changing geo-political landscape" part of reason for sale, along with "changing customer preferences."
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.