GM, PSA Execs Rush to Build Support for Opel Sale

Top executives from General Motors Co. and PSA Group are scrambling to build support among alarmed European government and labor leaders for a plan to integrate GM’s Opel unit with PSA.

The two carmakers got off to a rocky start on Tuesday with their surprise announcement about a possible Opel sale. The news ignited a firestorm of concern among unions and lawmakers about potential plant closures and job losses.

GM CEO Mary Barra told Opel workers on Wednesday the aim of the talks is to enable the two companies to “leverage their complementary strengths” and improve their competitive positions. Reuters says PSA CEO Carlos Tavares is preparing to tell German government and labor leaders that any deal would maintain Opel “as a German company in full compliance with German labor law.”

It isn’t clear if the outcome would be an expanded collaboration, a one- or two-way equity swap or an outright sale. Opel and PSA already share production of jointly developed SUV/crossovers and commercial vans at three factories in Europe.

But the question of job loss is especially sensitive in France and Germany, both of which will hold general elections later this year. British government officials already have advised GM they would oppose any move to trim the 4,500-member workforce at the two Opel factories in Ellesmere Port and Luton, England.

Sources tell Reuters the idea of a merger evolved out of continuing talks between the companies after GM sold its 7% stake in PSA in 2013. At the time, PSA’s Peugeot family was pressing GM to increase its investment in the French company.