Fears for UK jobs as French eye Vauxhall

Peugeot in daring bid to take over British rival

THE French owner of Peugeot and Citroen has launched an audacious bid to take control of the business behind British carmaker Vauxhall.

Motoring giant PSA yesterday confirmed it is in advanced talks to buy the European arm of American rival General Motors (GM), which includes its loss-making Vauxhall brand in the UK and Opel on the continent.

The deal would create Europe’s second-largest carmaker behind Volkswagen and bring names including Peugeot, Citroen, DS, Opel and Vauxhall under the same roof. But unions are now urging the Government to seek assurances over British jobs.

GM employs around 35,000 people in the UK under the Vauxhall brand, including 4,500 staff at plants in Luton and Ellesmere Port, where it makes the Astra Hatch and the Astra Sports Tourer.

Len McCluskey, Unite’s general secretary, said: ‘The French government owns a significant chunk and they’ve already come out to say they welcome the prospect of Peugeot buying Vauxhall. We want to make sure our Government is not sitting on the sidelines because you can bet your life the French will be defending French jobs.

‘I’ll be seeking urgent conversations with the Government because everything must be done to secure our world-class automotive industry.’

A PSA spokesman said it was too early to speculate on the nature of the deal. But a merger would probably lead to job cuts across Europe.

PSA, which has worked with GM in Europe since 2012, said it was exploring ‘strategic initiatives’, but said there was no guarantee an agreement would be reached.

A Department for Business, Energy and Industrial Strategy spokesman said: ‘Speculation is a matter for the companies involved. The Government remains in close contact with GM as we closely monitor the situation.’ Vauxhall was founded in 1857. Its manufacturing plant in Ellesmere Port, in the North West, was opened in 1962 and started making cars two years later.

It now produces 47 cars an hour and the Vauxhall Astra and the Vauxhall Corsa are among the best-selling cars in the UK.

The talks are the second time PSA and GM have attempted a partnership. The two had an agreement in Europe, which involved GM taking a 7pc stake in PSA, but it was unwound in 2013.

They have also had their fair share of financial difficulties.

Last week GM reported a £206m loss from its European operations last year, for the 16th consecutive year, which brought its losses on the continent since 2000 to more than £12bn.

The firm also said it had to raise UK car prices by 2.5pc after the EU referendum result.

PSA nearly collapsed three years ago, resulting in a £2.5bn statebacked bailout. The French government now owns 14pc of it.