Announcing the deal in Paris, Carlos Tavares, PSA chairman, moved to play down fears that there would be plant closures at Vauxhall in the UK, which directly employs 4,500 people at plants in Ellesmere Port and Luton, or Opel in Germany, despite the fact GM Europe has not made a profit since 1999.

'Trust the talents of people'

Mr Tavares said the plants would be given a chance to reach the necessary “benchmark” of efficiency. He added, “We do not need to shut down plants. We believe we need to trust the talents of people. They always come up with ideas and solutions we could not imagine. Shutting down plants is rather simplistic.”Nevertheless, unions said that firm assurances over the future of GM plants and jobs should be given, and Sir Vince Cable, former UK business secretary, warned that the decision to leave the EU could make it harder to safeguard British jobs.He told BBC Radio 4's Today programme, “There is one big doubt, which is the future of the customs union, the single market arrangements. Car components have to go backwards and forwards across frontiers and they will require tariffs and checks. Vauxhall particularly is exposed to this, about 80 per cent of its exports are to the European Union, most of its components are.

Britain vs Germany

“If you are a hard-headed car executive looking at the competitiveness of Britain versus German plants, Britain I'm afraid is going to slip down the ranking in future. The Germans are going to lobby very hard to protect their own plants, the German government bringing pressure to bear on France – those two countries staying within the European Union – it tips the balance against the UK, regrettably.”

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But Business Secretary Greg Clark said he was cautiously optimistic about the future of the UK plants. “Vauxhall has a long history of success in this country and we are determined to see that continue. The government welcomes the assurance by PSA that they will respect the commitments made by GM to Vauxhall's employees and pensioners,” he said.“We will continue to engage and work with PSA in the weeks and months ahead to ensure these assurances are kept and will build on the success of both sites for the long term.

Growing the Vauxhall brand

“The prime minister and I have been in close contact with the PSA Group and General Motors and they have been clear this deal is an opportunity to grow the Vauxhall brand, building on their existing strengths and commitments.“I have set out the government's determination to make the UK one of the world's most attractive locations for innovative future vehicle technology, including electric vehicles and battery technology.”PSA said in a statement that it was “confident that the Opel/Vauxhall turnaround will significantly accelerate with our support, while respecting the commitments made by GM to the Opel/Vauxhall employees.”However, the company that it expected to make savings of £1.47 billion a year by 2026, with most of the savings being made by 2020.Mr Tavares told the BBC that he trusted the Vauxhall staff to work in a “constructive manner” with PSA to improve their performance. “As long as we improve the performance and we become the best, there is no risk they should fear,” he said.For related news and features, visit our Enterprise section.Access hundreds of global services and suppliers in our Online Directory  Get access to our free Global Mobility Toolkit

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