* Peugeot briefs unions on alliance as GM prepares Opel plan
* Plant cuts were part of GM-Peugeot talks - source
* France "vigilant" over possible Aulnay closure move -
By Laurence Frost and Christiaan Hetzner
PARIS/FRANKFURT, March 23 Auto workers at
Peugeot and at GM's Opel unit are braced for a fight with
management as a clearer picture emerges of the job cuts and
plant closures likely to result from their alliance.
PSA Peugeot Citroen shed light on the "immediate
social consequences" of the tie-up at an internal briefing on
Friday, CGT union leader Bruno Lemerle said. "As we suspected,
they're mostly negative for jobs."
Paris-based Peugeot and General Motors unions will
meet in Brussels to coordinate opposition to the expected cuts,
labour representatives at both companies said.
Europe's auto industry is grappling with excess capacity and
cut-throat price competition as overall demand sags under the
weight of the debt crisis. All major car makers except
Volkswagen lost money in the region last year.
GM, based in Detroit, is preparing an Opel business plan for
presentation next week amid mounting signs that the alliance
with Peugeot will help both partners close or shrink factories.
While both automakers have said some factories must close or
downsize to stem losses, they have so far maintained that plant
decisions are unaffected by their partnership in vehicle
development and production.
However, an adviser who took part in the GM-Peugeot
negotiations said factory closures were an inseparable part of
the manufacturing talks but won't be announced in France until
after the May 6 presidential election.
"Both companies have a pretty clear idea of what they'd like
to do," said the adviser, who declined to be identified or give
details. "The French are obviously not going to announce it now,
before the election."
Under the alliance plan, unveiled on Feb. 29, GM and Peugeot
are targeting at least $2 billion in annual savings from shared
purchasing, logistics and the joint development and production
of vehicles and parts. GM, the world's biggest automaker, is
paying 304 million euros ($403 mln) for a 7 percent stake in
Some of the first cutbacks could be felt in research and
development. Peugeot told unions on Friday that it may share
automatic dual-clutch gearboxes with GM instead of developing
its own for 2014.
Chief Executive Philippe Varin last month suspended plans to
build the fuel-efficient transmissions in northern France. The
220 million euro project, announced four months ago, was to have
safeguarded 400 jobs at the Valenciennes plant.
GM's five-year plan for Opel, to be presented to its board
next Wednesday, is likely to include more than one plant
closure, according to people familiar with the company's
GM plants in Bochum, Germany and Ellesmere Port, England,
are most at risk. Opel's European sales tumbled by a fifth in
the first two months of this year - worse than the 18 percent
decline at the Fiat and Peugeot brands, but better than
Renault's 28 percent plunge.
Other sites are likely to come under pressure as Peugeot and
GM prepare to introduce their first joint vehicles from 2016.
Under the plan, subcompacts like GM's Opel Corsa and the
Citroen C3 will be based on Peugeot technology, while mid-sized
cars such as the Opel Insignia, Citroen C5 and Peugeot 508 will
draw on GM platforms.
Opel has already slowed Corsa assembly at plants in
Zaragoza, Spain and Eisenach, Germany, where the work week has
been shortened to 30 hours from 38.
Zaragoza, which employs 5,400 workers, has ordered temporary
layoffs as production slumps to an expected 280,000 vehicles
this year, below 70 percent of capacity, from 365,000 in 2011.
"We have to be more efficient and adjust our production to
the situation in our markets," said a spokeswoman for Opel in
Spain, declining to comment on possible further cuts.
The shift to a joint small-car programme could also seal the
fate of Peugeot sites in Madrid and Aulnay, near Paris, that
were already under threat.
An internal company document leaked last June expressed
doubts over the Madrid plant and outlined plans to announce
Aulnay's closure after the upcoming election.
While denying that any decision had been taken, CEO Varin
acknowledges that Aulnay's future is uncertain beyond 2014.
The plant may not last that long, according to a French
government official, who said worsening conditions could yet
force Peugeot to announce an earlier closure date after the
"We hope there won't be any nasty surprises but we remain
very vigilant," he said.
Peugeot's Madrid factory, which employs 2,700 workers, is
swiftly losing business as its 207 small car is replaced by the
208, assembled in France and Slovakia.
An earlier decision to build a future compact car in Madrid
remains suspended indefinitely, Peugeot said today - leaving the
plant with dwindling volumes of two niche 207 variants, a
station wagon and a coupé-cabriolet.
"With no new models coming, the plant is already in a
downward spiral," a CGT union spokesman said. "Madrid and Aulnay
are clearly both in the firing line."