General Motors has well and truly thrown the cat among the pigeons this week with its bombshell revelation it will pursue an alliance with PSA Peugeot Citroen that will see the Detroit automaker take a 7% stake in the French giant.
The news has sent the bush telegraph among GM and PSA’s European divisions into virtual meltdown, as the respective workforces and their representatives attempt to make sense of the extraordinary development.
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What has made the labour bodies most nervous of course is any potential job implications from the tie-up, with GM declining to elaborate on what the alliance could mean for its deeply troubled Opel/Vauxhall European operation.
Because on the back of yet more good numbers from the US the one glaring, gaping hole in GM’s finances is of course Europe – again – which last week revealed a staggering US$700 loss haemorrhaging from its accounts.
This, on the back of equally grim results in the past few years, has seen the rumour mill crank up into a frenzy as speculation mounts as to whether or not GM could look at disposing of Ellesmere Port in the UK or the highly sensitive – from a union and German perspective – Bochum plant in Germany.
Speaking to just-auto today on condition of anonymity, one highly-placed and reliable union source on the Continent told me “it was obvious the alliance between PSA and GM on a global level will have an impact on Opel, it is unavoidable there will be an impact.”
It’s not surprising the source wants to remain confidential – as he put it with eloquent understatement: “The situation is rather delicate.”
I’ll say. Today, the UK Unite union, representing many of GM’s 2,100 Ellesmere Port Vauxhall workers, rushed out a statement to just-auto as rumour and counter-rumour whirled around the situation and as staff warily eyed yet another announcement from Detroit that hardly fills them with over-confidence.
“There is not one iota of business logic in closure and that is the case we will be making stridently to GM and their shareholders,” thundered Unite national officer Roger Maddison.
“Ellesmere Port is the most efficient plant in GM’s European family and the UK is their biggest market ,” he added, noting somewhat menacingly: “There is a legally-binding agreement with GM to support production at Ellesmere Port until 2014.”
Back in Europe, my source also noted wryly part of the problem lay with GM’s stance that Opel/Vauxhall could not operate outside European boundaries, so having a global alliance may not alter that situation very much.
Or could it, could GM be positioning itself to free Opel/Vauxhall from its European constraints on a Continent wracked with myriad financial woes?
But the jobs issue has so spooked the British government, it sent its Secretary of State for Business, no less, Vince Cable, across the Atlantic this week to New York, where he met GM CEO Dan Akerson in a bid to impress on him the potential of the UK market, which has already seen US$6.4bn of automotive investment ploughed in from global manufacturers.
In the coy language of politicians where it is sometimes hard to read the runes, the Business Secretary’s department in London gave me some titbits from the Cable/Akerson summit in the Big Apple: “In the US, they may not be quite so aware of what we have got to offer and what is going on here,” a spokeswoman told me.
“We wanted to make it clear what we had to offer. The Secretary of State wanted to be sure GM was well aware of the strengths…Ellesmere Port is one [of] their most productive plants.”
The UK is gamely attempting to balance its own enormous financial deficit and the last thing it needs is two thousand redundant workers in North-West England and possibly many thousands more adding to swelling unemployment numbers as the supply chain effects trickle down.
And this just weeks before the annual UK budget, where it’s highly unlikely the British Chancellor of the Exchequer will have anything much in the way of good cheer.
Across the English Channel, the French are equally eyeing the alliance developments with some concern. The Force Ouvriere union notes its PSA compatriots, as well as those in the company’s Spanish, British and German European Works Council, have asked for an extraordinary meeting on 16 March in Paris to discuss the issue
PSA may well be in a position to lever far more from any alliance than their German and British colleagues, but GM has startled them both with its announcement.
Next week sees the annual razzmatazz and jamboree that is the Geneva Motor Show and GM vice chairman Steve Girsky – parachuted in recently to become Opel’s board chairman – is scheduled to be there.
No matter how many shiny new products on the GM stand, there might be only one topic of conversation.
