UK unions have called for urgent talks with PSA, owner of Vauxhall, following news that the French car manufacturer is proceeding with a merger with Fiat Chrysler.
“Merger talks combined with Brexit uncertainty is deeply unsettling for Vauxhall’s UK workforce which is one of the most efficient in Europe,” said Des Quin, national officer of the Unite union – the UK and Ireland’s largest union representing car workers.
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“The fact remains, merger or not, if PSA wants to use a great British brand like Vauxhall to sell cars and vans in the UK, then it has to make them here in the UK.”
It was confirmed yesterday that there were ongoing discussions regarding a possible merger between the two groups.
Today, the companies said they have each unanimously agreed to work towards a full combination of their respective businesses by way of a 50-50 merger. The combination would create the fourth largest OEM in terms of unit sales (8.7m vehicles) globally, with a joint revenue of almost €170bn (£146bn).
“In a rapidly changing environment, with new challenges in connected, electrified, shared and autonomous mobility, the combined entity would leverage its strong global R&D footprint and ecosystem to foster innovation and meet these challenges with speed and capital efficiency,” FCA and PSA said in a statement.
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By GlobalData“Both share the conviction that there is compelling logic for a bold and decisive move that would create an industry leader with the scale, capabilities and resources to capture successfully the opportunities and manage effectively the challenges of the new era in mobility.”
The companies predict that 80% of synergies would be achieved after four years, with a total one-time cost of €2.8bn (£2.42bn) expected to complete the merger.
Carlos Tavares will lead the new company, serving as chief executive for an initial term of five years. The board will be composed of 11 members – five nominated by FCA (including John Elkann as chairman), and five nominated from PSA (including senior independent director and the vice chairman).
Tavares said: “This convergence brings significant value to all the stakeholders and opens a bright future for the combined entity. I’m pleased with the work already done with Mike and will be very happy to work with him to build a great company together.”
