PSA chief pledges to keep Vauxhall’s UK plants open for now

PSA, which owns Peugeot and Citroen, has pledged to keep Vauxhall’s British plants open for the time being and protect pension scheme members, UK business secretary Greg Clark said after meeting with PSA boss Carlos Tavares.

He said the meeting was “reassuring,” and that Mr Tavares had told him that the French carmaker’s approach “is to increase market share and expand production, rather than close plants”.

PSA is in talks to buy Opel, which is loss-making, from General Motors, in a deal expected to be announced as early as next week.

PSA has committed to honour Opel’s existing job protection agreements, as well as current production plans that include manufacturing the Astra hatchback at Ellesmere Port until the end of the decade.

“I was assured that the commitments to the plants would be honoured,” added Mr Clark.

Vauxhall, which also has a production site at Luton, has a pension deficit of £1bn and 15,000 members in the scheme.

The future ownership of the scheme is not currently known, but analysts expect PSA to take on the liabilities as part of the deal.

The leader of the largest union at Vauxhall’s UK factories said earlier he had a “relatively positive” meeting with PSA’s boss, after news of its proposal to buy GM’s European business raised fears for the future of its UK operations.

After the meeting in London on Friday, Greg Clark said:

“I had a constructive meeting with the Chief Executive in which I made the case for how important Vauxhall is to the UK, the excellence of its plants and operations across the UK and how successful they have been.

“The meeting was reassuring, we discussed how PSA’s approach is to increase market share and expand production, rather than close plants. I was assured that the commitments to the plants would be honoured. There was also recognition that members of the Vauxhall pension fund will be no worse off.

“Mr Tavares said no deal has been done, discussions continue and he and I agreed to stay in close touch. This is a very important company and workforce which has been successful and we all want it to be just as successful in the future.”

A spokesman for PSA said:

“Carlos Tavares reiterated PSA’s commitment to further develop the iconic and valuable Vauxhall brand for the benefit of its loyal customers.

During the meeting Carlos Tavares and Greg Clark established an open and trusting relationship and declared themselves happy to remain in close contact in the coming months and to continue the dialogue with the support of the prime minister.”