Peugeot Labor Unions Concerned About GM Tie-Up image

Today, June 28th, Peugeot’s labor unions have expressed their concerns regarding the automakers plan to revive the deeper tie-up plan with GM.

Labor unions are concerned that such a move only means major capacity cuts and serious obstacles, but the automakers might prepare to tackle overcapacity. Neither Peugeot nor the founding Peugeot family commented on the rumors that the founding shareholder would be ready to give up the company for a new investment from GM.

“A dilution of the family would not be good news,” a spokesman for Peugeot’s moderate CFTC union said. “One of the last remaining family groups would cease to exist in its current form. It’s the family attachment to the company that has preserved its French roots so far.”

Gm has already took a 7% stake in Peugeot last year in a 1 billion euro share, and the two automakers also plan to create future vehicle programs. Until now the two parties have postponed taking big decisions on combining production, to reach higher potential savings.

“An eventual dilution of the Peugeot family seems hard to avoid,” Paris brokerage Aurel BGC said in a note.”But deepening the agreement with GM would likely require a guarantee that (more) plant closures and job cuts could be carried out in France.”

Source: Reuters