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Published: Fri, February 17, 2017
Hi-Tech | By Lula West

Peugeot shares soar on reports of merger with GM's Opel

Peugeot shares soar on reports of merger with GM's Opel

It said in a statement: "PSA Group confirms that, together with General Motors, it is exploring numerous strategic initiatives aiming at improving its profitability and operational efficiency, including a potential acquisition of Opel".

General Motors employs around 4,500 staff at its Vauxhall headquarters in Luton where it makes mainly commercial vehicles and its Ellesmere Port plant.

Spokespeople for Opel and the French government, which owns 14 percent of PSA, had no immediate comment.

The Vauxhall brand, purchased by General Motors in 1925, presently accounts for around one-fifth of Opel sales, with the United Kingdom traditionally being the largest market for the Corsa and Insignia.

"The UK market is the largest market in the European Union for Vauxhall/Opel so GM does have a moral obligation not to turn its back on the communities and workers who have helped make this company what it is today", McCluskey said.

Unite's general secretary, Len McCluskey, said it was his priority to speak to GM about what impact the proposed deal would have on the employees. In a life-saving measure, the Peugeot family was forced to sell 25.6 per cent of its stake in the French auto maker, with 12.8 per cent going to the French government and a further 12.8 per cent to Peugeot's Chinese joint venture partner Dongfeng. "The UK government has to offer at least equal but actually better backing for UK workers".

That was the 16th consecutive loss-making year for GM in Europe, bringing its cumulated losses on the continent since 2000 to more than $15bn. It almost sold the division after going bankrupt in 2009 and the Ellesmere Port Vauxhall factory - dubbed "home of the Astra" - came very close to closure in 2012.

GM's European operations have proved problematic for the U.S. vehicle maker.

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

"This can be done, in our view, while controlling access to the labour market so it is vital that the government thinks again about its priorities for United Kingdom manufacturing".

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