French union, CFDT, says it was summoned early this morning (31 October) along with other labour bodies, for a meeting with PSA in Paris to discuss a planned 50:50 merger with FCA to create a giant manufacturer with combined revenue of EUR170bn (US$190bn).
No details have so far emerged as to the nature of these discussions, but union reaction to the mega-proposal will be critical as PSA and FCA look to make good on a promise not to proceed with plant closures should the deal secure the green light.
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Before the meeting this morning in Paris, the Sochaux Belchamp CFDT (Confédération Française Démocratique du Travail), said the project required deep analysis with its experts to take into account opportunities and risks, adding management is clarifying there are no site closures planned.
“At this stage of discussions, the CFDT is not closed to such an alliance, which could be an opportunity for the Group to develop its internationalisation, but is being prudent and waiting for precise replies to its questions, notably on the continuation of activity at French factories [and] on expected synergies, as well as future management,” said CFDT central union delegate, Christine Virassamy.
PSA and FCA say the combination would create the 4th largest global OEM in terms of annual unit sales (around 8.7m vehicles) and combined revenues of EUR170bn.
They add there will be approximately EUR3.7bn estimated annual run-rate synergies without any plant closures resulting from the transaction.
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By GlobalDataIt is projected 80% of the synergies would be achieved after four years. Total one-off cost of achieving the synergies is estimated at EUR2.8bn.
CFDT’s cautious approach so far to the proposition has not been echoed across the English Channel by British labour body, Unite, which has expressed deep worries surrounding the PSA-owned Vauxhall brand in the UK and its manufacturing facilities.
Unite said it would be seeking an urgent high level meeting with PSA, the owner of Vauxhall, following the merger news.
British fears concerning any merger are also set against the current Brexit impasse, which has fuelled speculation as to the future of UK manufacturing in the event of a no-deal exit.
That possibility appears to have receded however, given the British Parliament’s decision to hold a general election on 12 December following a rolling Brexit extension to 31 January agreed with the EU to finalise London’s terms of departure from Brussels.
