Peugeot to meet unions on GM tie-up

PSA Peugeot Citroen will hold a special European works council meeting on March 16 to discuss the effects of this week's tie-up with US giant General Motors, unions said on Friday. "All the French, Spanish, British and German members of PSA's European works council asked for an extraordinary meeting concerning the PSA-GM alliance," FO union leader Jean-Francois Kondratiuk said in a statement. Kondratiuk said that management had asked for the meeting to be held at the French group's Paris headquarters, after the tie-up announced Wednesday that will see GM take a seven percent stake in the French group. Both groups have so far refused to discuss possible job cuts or factory closures that might result from the alliance, which has worried unions. Both manufacturers are considered burdened by over-capacity, struggling with flagging sales in Europe, where the eurozone debt crisis has brought back clouds of recession. For GM, nearly $750 million in European losses marred a record year of profits in 2011, while Peugeot, which sells two-thirds of its vehicles in Europe, saw sales drop 1.5 percent last year and its profit halved. A source close to the matter has said that GM was planning job cuts and possibly factory closings at Opel and Vauxhall, which together sell more than a million vehicles each year. Leading family member Robert Peugeot said meanwhile that the future of the company's many existing cooperation agreements with other manufacturers would be dealt with "on a case-by-case basis." "That will be dealt with on a case-by-case basis, I believe, in an extremely rational manner, " he told BFM-Business television channel. "Concerning PSA, we will of course look with our partners at the cooperation agreements whether the alliance that we've just announced will have an effect, or even a positive effect," he said. "There are some instances of cooperation where extra volume could only be beneficial." The group already has cooperation agreements with the German firm BMW to build petrol engines, with Fiat and Turkey's Tofas to build light trucks, and with US giant Ford for diesel engines. PSA also works with the Japanese automaker Mitsubishi to build SUVs and electric cars, with Toyota for small cars and with its historic French rival Renault to build motors and mechanical parts. PSA Peugeot Citroen and GM said on Wednesday that their global cooperation deal would slash costs for both and boost their competitiveness in Europe. The two said GM, the world's largest automaker, would take a 7.0-percent stake in Peugeot Citroen, Europe's number two after Volkswagen of Germany. French Industry Minister Eric Besson welcomed the deal as "good news" for jobs, saying he had been assured by Peugeot "that this partnership will be favourable to PSA's employment and presence in France."