Peugeot proposal to buy GM's Opec quickly hits German headwinds

Berlin - PSA Group’s proposal to buy General Motors Company’s Opel brand quickly ran into headwinds in Germany, with political and labour leaders vowing to protect jobs and the unit’s manufacturing footprint in the country.

"The company carries responsibility for the sites, the development centre and securing employment," German Economy Minister Brigitte Zypries, a Social Democrat, said in an e-mailed statement to Bloomberg.

"This is my clear expectation regarding General Motors."

Zypries called it "unacceptable" that GM discussed a possible Opel sale without first speaking with the works council, labour unions and the state government in Hesse, where Opel is based.

The manufacturer has three plants in Germany and the future of jobs at the sites could become a topic in this year’s federal election.

A combination would create a manufacturer with about 16% of the European car market, pushing past Renault SA to become the region’s second-biggest auto group after Volkswagen. A deal would also be the second run at linking the two mass-market car makers.

Any renewed effort is likely to centre on finding ways to cut costs - and ultimately jobs - because the two have overlapping product offerings.

Hesse Economy Minister Tarek Al-Wazir said the carmaker’s employees must get swift clarity about the future of the Opel sites. Opel has been on an upward track in recent years and his government will work to keep it this way, he said.

It would help to seek a good solution for Opel in cooperation with workers, Al-Wazir said in a video posted on his Facebook site.

Plants threatened

Germany’s Metall labor union and Opel’s works council said they were caught by surprise with news of the potential sale of Opel to, the maker of Peugeot and Citroen brand cars.

Any such talks without their consent would be "an unprecedented violation of all German and European co-determination rights," the two said in a joint statement.

"Almost all experts say that with this deal now being prepared between the large French, almost state-owned conglomerate and Opel, that especially the German Opel plants may be on the losing side," Rainer Einenkel - former works council chief at Opel’s Bochum plant, which was shut down - said on Deutschlandfunk radio.

"It’s to be assumed that the German plants are under acute threat."

Hesse’s Prime Minister Volker Bouffier said earlier that he’ll seek talks with company management, with a view to securing jobs and keeping Opel’s development centre - "the core, the most important part of Opel" - in Ruesselsheim, outside Frankfurt.

"I can’t rule out that General Motors has made an assessment that they want to pull out of Europe," Bouffier said. While it’s speculative, "it could also be that General Motors, with respect to the vision of the new American president, has decided to concentrate more on America and less on Europe."

On the French side, a Peugeot union representative expressed support for deeper cooperation between the two automakers and said he wasn’t surprised by the talks.

The French manufacturer’s unions aren’t concerned about job loses at the automaker because PSA signed a deal last year that includes employment guarantees, CFE-CGC union representative Jacques Mazzolini said by phone.