PSA Woos Merkel, Opel Workers With Vow to Keep Jobs, Brands

  • Tavares tells German leader he’ll maintain Opel’s sovereignty
  • Acquisition valued at about $2 billion may be agreed this week

GM, Peugot Said to Value Opel at $2B as Talks Advance

PSA Group Chief Executive Officer Carlos Tavares sought to ease tensions over the proposed acquisition of General Motors Co.’s European business by assuring workers and German Chancellor Angela Merkel that he’ll protect jobs and the Opel brand.

The manufacturer of Peugeot and Citroen cars will honor existing labor agreements and seek to revive the Opel-Vauxhall division, Tavares said in his first public statement since news of the deal broke. The CEO, who made his case to Opel labor representatives on Monday, repeated assurances to the German leader in a phone call on Tuesday.

“PSA Chief Tavares emphasized that both businesses complement each other well,” Merkel spokesman Steffen Seibert said in a statement. “He affirmed to the chancellor that PSA will maintain Opel’s sovereignty within the group and will assume guarantees on sites, investment and employment.”

Carlos Tavares

Photographer: Matthew Lloyd/Bloomberg

PSA executives are conferring with government and labor leaders across Europe to gain support for the Paris-based company’s planned acquisition of GM’s unprofitable business in the region. Corporate rules in France and Opel’s home base of Germany give worker representatives a say in major decisions, especially any affecting jobs. Merkel supports a possible deal, a PSA spokesman said.

Creating the conditions for a “rebound” at Opel is one of the “common goals” that PSA managers and Opel’s employee representatives agreed on, according to a joint statement issued by PSA and GM’s works council on Tuesday.

“Tavares communicated convincingly in the talks that he is interested in a sustainable development for Opel-Vauxhall as an independent company,” works council Chairman Wolfgang Schaefer-Klug said. “We are ready to explore further the chances of a potential coming together.”

GM and PSA are discussing a valuation for Opel and Vauxhall of roughly $2 billion as the automakers push to reach an agreement as soon as the end of this week, people familiar with the matter said on Friday.

Opel and PSA have already been cooperating on vehicle development, and the Ruesselsheim-based GM division on Monday introduced a compact sport utility vehicle that shares underpinnings with a Citroen model. Labor leaders have been pushing for the companies to protect jobs in any deal after both automakers shuttered factories in recent years in an effort to return to profit.

The French state is one of PSA’s biggest shareholders following a bailout in 2014. While the company’s dependence on Europe’s expensive workers and demanding consumers brought it to the brink of bankruptcy, and Tavares has been pushing international growth since taking office three years ago, PSA is now seeking to deepen its roots in the region.

“We both need to consolidate our base in Europe and take advantage of this strong base” in order to expand abroad, PSA Chairman Louis Gallois said on the sidelines of a conference in Paris. He reiterated Tavares’s commitment to honor Opel’s brands and its workers. “We aren’t coming with a plan to make Opel-Vauxhall the 14th division of the house.”

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