By William Boston in Berlin and Nick Kostov in Paris
The chief executives of General Motors Co. and Peugeot moved
quickly on Wednesday to head off political resistance in Germany to
the potential sale of GM's Opel unit to its French rival.
Both companies said on Tuesday they were in talks that could
lead to the sale of GM's troubled European business to Peugeot. It
quickly became clear, however, that political opposition to job
cuts in a year of hotly contested elections in Germany and France
would be one of the biggest obstacles to any deal.
The push to complete a sale of Opel is a test of whether Europe
can still build cross-border champions in an era of rising
nationalism. The talks aim to stitch together businesses that span
the U.K., France and Germany at a time when antiestablishment
politicians in all three countries are seeking to pull the European
Union apart.
GM Chief Executive Mary Barra and the company's president, Dan
Ammann, flew to Germany overnight to meet Opel's management and
senior labor representatives at Opel's headquarters in Rüsselsheim.
The meeting appears to be the first extensive discussion about the
sale that Ms. Barra has held with senior management at Opel.
In Paris, Peugeot Chief Executive Carlos Tavares, who is
credited with a swift three-year turnaround of the French car
maker, reached out to German Chancellor Angela Merkel to try to win
her backing for the deal, according to the company. Ms. Merkel's
spokesman told reporters that the government hadn't yet received a
request from Mr. Tavares for a meeting, but stressed that the
government would play an active role in any sale of Opel.
"Opel is an innovative company with a long history in Germany,"
said Steffen Seibert, Ms. Merkel's spokesman. Considering "the
consequences for jobs at many locations in Germany, it's clear that
we, the government of the Federal Republic, will be involved," he
said.
The Opel sale opens old wounds for Ms. Merkel. In 2009, she
fought hard with GM to ensure that GM's planned sale of Opel to
Magna International Inc. of Canada wouldn't lead to massive job
cuts at the German factories. Two months after signing the deal, GM
pulled out of the sale and committed to rebuilding its European
business.
GM's latest turnaround comes as Ms. Merkel faces a tough
reelection bid. Her liberal immigration policies have boosted the
popularity of an antiestablishment party, Alternative for Germany.
And, for the first time in years, a resurgent Social Democratic
party leads Ms. Merkel's conservatives in the polls. The two
parties share power in Ms. Merkel's coalition government.
Surprised by GM's renewed change of heart, Ms. Merkel's cabinet
held "intense discussions" about the sale and Opel's future at its
weekly meeting on Wednesday, said Andrea Nahles, a Social Democrat,
and labor minister.
"Our highest priority is securing the three Opel factories in
Germany," Ms. Nahles told reporters after the cabinet meeting.
Opel is one of Germany's oldest car makers. The company began
making sewing machines in 1862 and began making cars in 1899. GM
bought the struggling company in the midst of the financial crisis
of 1929.
Today, Opel and its British Vauxhall unit operate 10 factories
in Europe. The company employs 38,000 people, 19,000 of them in
Germany.
Brigitte Zypries, Germany's economics minister, said it was
"completely unacceptable" that GM and Peugeot carried out
negotiations about the sale of Opel without any involvement from
trade unions or the company's workforce, which under German law has
extensive rights to influence management decisions.
"We will study a potential sale of Opel/Vauxhall to Peugeot
without reservations based on our previous experience with
Peugeot," Ms. Zypries said.
Members of Ms. Merkel's Christian Democrats also cited job
security for Opel's German workforce as their priority. Volker
Bouffier, prime minister of Hesse state, where Opel is based, said
it didn't matter who owned Opel, adding: "What matters is what
happens here."
The deal could also run into political interference in France if
French jobs are threatened, analysts said. The French government
holds a 14% stake in Peugeot. And isolationist far-right leader
Marine Le Pen, who could be expected to give preference to
protecting French jobs, is expected to poll strongly in the looming
presidential election.
Peugeot risks getting caught in a vice as governments and unions
in both countries stand in the way of possible restructuring.
French unions are notorious for bending political leaders to their
will by paralyzing the economy with strikes and protests.
"We won't accept any deal that hurts workers in either France or
Germany, whether that's through a reduction in the number of jobs
or their purchasing power. We will be uncompromising," said
Jean-Pierre Mercier, a member of the CGT labor union at
Peugeot.
But concern that Mr. Tavares could seek job cuts elsewhere, such
as at Vauxhall, GM's British auto maker, to secure the support of
Germany and France, sparked warnings from Britain's Unite trade
union.
Len McCluskey, Unite's general secretary, said GM's decision was
likely a result of the Brexit vote and called on the U.K.
government to provide assurances to Vauxhall just as the government
did to convince Nissan to continue producing its Qashqai
sport-utility vehicle in the U.K.
"It cannot be that the future of U.K. car workers' jobs now lies
in the hands of the French government and their backing for
Peugeot," Mr. McCluskey told reporters in London Wednesday after a
meeting Greg Clark, a government minister in charge of industry
strategy. "The U.K. government has to offer at least equal but
actually better backing for U.K. workers."
--Zeke Turner in Berlin contributed to this article.
Write to William Boston at william.boston@wsj.com and Nick
Kostov at Nick.Kostov@wsj.com
(END) Dow Jones Newswires
February 15, 2017 12:37 ET (17:37 GMT)
Copyright (c) 2017 Dow Jones & Company, Inc.
General Motors (NYSE:GM)
Historical Stock Chart
From Apr 2024 to May 2024
General Motors (NYSE:GM)
Historical Stock Chart
From May 2023 to May 2024