PARIS (AP) – General Motors Co. is selling its loss-making European car business – including Germany’s Opel and British brand Vauxhall – to French automaker PSA group.
The 2.2 billion euro ($2.33 billion) deal announced Monday in Paris by GM and PSA – maker of Peugeot and Citroen cars – will realign the industry and create Europe’s No. 2 automaker after Volkswagen. The combined company could make 5 million cars a year.
PSA will join with French bank BNP Paribas in the deal, which foresees taking over 12 manufacturing facilities that employee about 40,000 people.
Amid concerns about job losses, PSA CEO Carlos Tavares promised to keep existing GM commitments to workers.
The purchase marks a major turnaround for PSA, bailed out just three years ago by Chinese investors and the French state.
The leader of the Unite union in Britain says the organization’s priority is to ensure the long-term future of thousands of autoworkers affected by PSA’s purchase of the European operations of GM.
In a statement Monday, Unite general secretary Len McCluskey said the union will focus its attention on trying to persuade the new management that it makes sense to continue “building in Britain.”
But he insisted there is a role for government as “the uncertainty caused by Brexit is harming the U.K. auto sector.”
The British government is expected to formally trigger two-year discussions of Britain’s exit from the European Union in coming weeks.
Vauxhall, the British arm of GM’s European business, employs 4,500 people at plants in Ellesmere Port and Luton, where the Astra and Vivaro models are made.