Fears for Vauxhall jobs and pensions in £2bn takeover
But new owners insist they’ll stay in UK even if we get ‘hard Brexit’
THE £ 2billion takeover of Vauxhall by Peugeot will trigger brutal cuts to pensions and jobs, experts warned last night. The French PSA Group, which also owns Citroen, yesterday announced a deal to buy the European arm of General Motors, which includes Vauxhall and Opel.
Following weeks of frantic lobbying from ministers and trade unions, the chairman of the manufacturing giant sought to allay concerns for the 4,500 UK staff, most of whom work in Vauxhall plants in Ellesmere Port and Luton.
Business Secretary Greg Clarke said he was ‘cautiously optimistic’. But MPs and industry experts warned job losses were inevitable and a pensions expert warned staff would see cuts of up to 15 per cent to their retirement income.
PSA, which is 14 per cent owned by the French government, expects to save just under £1.5billion a year by 2026, fuelling fears it intends to close one or both of the UK plants. But at a press conference in Paris PSA’s chairman insisted this was not the case.
Carlos Tavares, who has a reputation as a ruthless cost- cutter having slashed thousands of jobs at Peugeot and Citroen, said: ‘We do not need to shut down plants.
‘We believe we need to trust the talents of people. They always come up with ideas and solutions we could not imagine. Shutting down plants is rather simplistic.’ He also promised to increase the presence of the company in Britain in the event of a ‘hard Brexit’.
He said this was because tariffs would force firms to source more components from local suppliers.
As part of the takeover PSA has pledged to stick to GM’s existing commitments in the UK.
This means it will continue to make the Astra in Ellesmere Port, Cheshire, until 2021, while production of the Vivaro van in Luton will continue until 2025.
But the French group is not prepared to take responsibility for the generous final salary pension enjoyed by UK workers, which has a funding deficit of around £1billion. This means GM will continue to be responsible for all pensions built up before the sale by staff and for paying pensions to former employees who have retired.
John Ralfe, an independent pensions consultant, warned that around 15,000 members of Vauxhall’s final salary pensions scheme could face cuts of up to 15 per cent to their benefits.
He said it was inevitable that workers would be moved into a defined contribution pension.
Unite said it would fight to keep the plants open and protect pensions. Len McCluskey, its general secretary, said: ‘It is vital that those who have saved hard for their retirement receive the benefits to which they are entitled.’
Mr Clarke said: ‘The conversations I and the Prime Minister have had, both with GM and PSA, tell me that PSA intends to safeguard the plants, honour their commitments and look to increase the performance and the sales of cars.
‘We want to hold them to those commitments, but the messages we’ve had lead me to be cautiously optimistic.’
Professor Christian Stadler of Warwick Business School said workers should prepare for redun- dancies. ‘PSA has done it before and there is no other way to realistically achieve the cost savings they have in mind,’ he said.
Experts say the combined group will have to shut some of its 24 factories in Europe, and that the French firm is more likely to wield the axe in the UK than in its homeland or in Germany, an EU ally.
The Liberal Democrats claimed the prospect of Britain leaving the single market after Brexit makes this more likely as PSA bosses seek to avoid tariffs.
Vauxhall exports around 80 per cent of its cars to the EU.
TORY and Labour MPs were broadly upbeat about the Peugeot/ Citroen takeover of Vauxhall but the Lib Dems were unhappy. Miseries. It was all going to end in disaster, jobs were going to be lost, etc, etc.
Nothing like a bit of can- do spirit, is there, lads?
Greg Clark, Business Secretary, was answering an Urgent Question from his Labour Shadow Rebecca Long-Bailey.
Mrs Long-Bailey – who once worked in a pawn shop and says she learned much about human unhappiness there (that was before she met the Lib Dems) – is Labour’s new hope.
She has only been an MP since 2015 but is already being touted as a successor to Jeremy Corbyn. It is hard to say if this is justified, for she has had few outings at the despatch box. She did okay yesterday. She did not embark on a partisan rant but kept things serious.
There are numerous jobs in the balance at Vauxhall’s Ellesmere Port and Luton factories.
An intemperate outburst might have won her points at Westminster but it would not have helped those workers.
Mr Corbyn arrived just in time to hear his 37-year-old protegee. Poor chap, he looked haggard. The morning had been full of hassle about his tax return, which he had published ( it contained a confusion which sent the sleuths of Westminster’s press lobby gallivanting off on a paperchase).
Which of us has not found tax returns confusing? Mr Corbyn is many things but surely not a tax dodger. It must have been a relief for him to listen to debate about real politics: big manufacturing and Government’s response to industrial change. Mr Clark was his mellifluous self, a voice dripping treacle, gesturing with his large hands as though holding a beach ball. Having once been in the SDP and attended the London School of Economics, he can speak amicably about trade unionism without sounding false.
This neutered some of the usual moans from the Left. Dennis Skinner (Lab, Bolsover) mocked Mr Clark for being a pro-TUC Tory but the intervention only made Mr Skinner sound tinny.
Mr Clark never responds to attack by going on the offensive. He seeks ways to agree pleasantly with his assailants. Utterly maddening. That sort of thing is a very dirty trick.
Mrs Long-Bailey, in her time allotted, asked about workers’ pension rights, the future of the Vauxhall Astra production line and the possibility of state support for the newly-owned company once we have left the EU.
She delivered her piece with a level tone and maybe a hint of the actor Nicholas Lyndhurst. There is certainly a physical similarity, around the motionless upper lip, with Mr Lyndhurst’s character Rodney in Only Fools And Horses. Mr Corbyn could always play Uncle Albert.
Kelvin Hopkins (Lab, Luton N) said ‘today’s news is actually very positive’. With sterling having fallen, Vauxhall’s factories could be even more appealing to management – provided something could be done about the amount of imported components used in the cars.
Mr Clark agreed. Geoffrey Robinson (Lab, Coventry NW), who once worked in the car industry (British Leyland!), made broadly supportive noises but noted Peugeot pulled out of its Ryton plant a few years ago.
Mr Clark said Peugeot was under different management today. SO It was left to John Pugh (Lib Dem, Southport) and Tom Brake (Lib Dem, Carshalton) to do the shroudwaving. Vauxhall’s ‘long-term prospects are weaker as a result of Brexit’, said Mr Brake, living up to his name. Mr Pugh wailed that Ellesmere Port’s Vauxhall factory made a lot of left-hand drive models, so could be in peril after Brexit.
Mr Clark replied: ‘I’m thinking up reasons to invest in Britain. He’s thinking up reasons to put people off.’ The only person gloomier than the Lib Dems was the SNP’s Margaret Ferrier (Rutherglen). But she always sounds like a deflating bagpipe. It is a voice to make Tigger himself swallow Prozac.