FRANKFURT/PARIS--PSA Group and General Motors mobilised their chief executives on Wednesday to defend the Peugeot maker's planned acquisition of GM's Opel against a German-led backlash that could derail the deal even before its terms are finalised.
Fearing job losses, Germany's federal government and powerful unions have heaped criticism on the tie-up plan, confirmed by both manufacturers on Tuesday. Britain also said it had contacted GM President Dan Ammann to express concern over the future of Opel's UK plants.
Paris-based PSA said it would despatch CEO Carlos Tavares to meet German labour and political leaders likely to include Chancellor Angela Merkel, as his GM counterpart Mary Barra visited Opel headquarters near Frankfurt. Tavares, expected to head the combined company if the deal goes through, "wants to meet Opel's German stakeholders," a PSA spokesman said, adding no date had yet been set for those talks. The French carmaker had no further comment.
PSA and GM have declined to say what cuts they would make to jobs, plants, production capacity or research and development under the deal being discussed. Of GM Europe's roughly 38,000 staff, about 19,000 are in Germany and 4,500 in Britain.
While little is known about its financial or operational terms, the prospects for a combined PSA-Opel have so far drawn only lukewarm investor enthusiasm. PSA shares fell almost 1 percent, reversing part of Tuesday's 4.3 percent gain after some analysts cautioned that significant cost savings would be needed to offset the combined company's dependence on Europe's competitive, mature market.
Key savings in production and research and development could prove elusive if the companies are forced to guarantee jobs and industrial sites to secure government and union acceptance. "There are too many unknown factors to get excited about a potential transaction," Berenberg analyst Alexander Haissl said.
Critical questions include "how quickly PSA can achieve potential savings and reduce GM Europe's cash burn," he told clients in a note. "Restructuring of German and UK plants could turn out to be difficult given the political pressure involved."
German unions can veto strategic decisions under the country's co-determination laws. After news of the secret deal talks broke, German Economy Minister Brigitte Zypries said it was "totally unacceptable" the companies had not included labour or local government representatives.
Berlin somewhat tempered its stance on Wednesday. The government has a "strong interest in a successful future" for Opel and will engage constructively with the discussions, a government spokesman said.
