While the two automakers have announced their merger on Wednesday, the project still has many unclear areas.
The 8.7 million-vehicle union between PSA and Fiat-Chrysler (FCA), unveiled on Wednesday December 18 by the two car manufacturers, will not be finalized before the start of 2021. However, it already raises questions and concerns, starting with that of its actual realization. Will the project pass through the validations essential for its realization: general meetings, American and, above all, European competition authorities? “In antitrust matters we do not anticipate any particular difficulty”, commented on the same December 18, Carlos Tavares, the president of PSA and future boss of the new entity. Of which act. But other points deserve to be examined.
Does the project involve risks for employment in Europe?
It is the number one question in France, in Italy but also in Germany and in the United Kingdom, in other words wherever the FCA-PSA brands have left a historic industrial mark. However, the newlyweds have promised: the 3.7 billion euros in synergies generated by this merger will not involve any plant closings. Nevertheless: PSA side, Force Ouvriere, the company’s first union, has called for the creation of a “merger monitoring committee” and “intends to obtain (…) guarantees on the production volumes of the all French sites”.
It is not in France that the situation is most worrying, French factories, excluding Poissy, are operating at full speed. In Italy, on the other hand, overcapacity is high. The first priority is “the question of employment,” said Rocco Palombella, secretary general of the Italian union UILM, on Wednesday. “The FCA factories all operate at less than 75% of their capacity, a value that is considered to be economically problematic,” explains a consultant.
The anxiety is also palpable in the United Kingdom, where employees of the Vauxhall brand, bought by PSA in 2017, fear that Brexit will become a pretext to break the promise of zero closure. The British union Unite requested an “emergency meeting” with group officials to obtain “guarantees for the long-term future of manufacturing in the United Kingdom”.
Is the concern well founded? “With Peugeot-Citroën, then with Opel, each time, Carlos Tavares did the same thing, explains Franck Don, CFTC delegate from PSA. He compacted factories, drove unnecessary expenses, negotiated wage moderation agreements, all with his eye on an indicator: the relationship between the cost of labor and production sold.”