March 6, 2017 / 2:41 PM / 2 years ago

PSA tells Spain's Rajoy it will honor labor deals at Opel plant

Carlos Tavares, Chairman of the Managing Board of French carmaker PSA Group, attends a news conference in Paris, France, March 6, 2017. REUTERS/Christian Hartmann

MADRID (Reuters) - PSA (PEUP.PA) Chief Executive Carlos Tavares has told the Spanish government the firm will honor existing labor agreements at Opel’s factory in Spain after buying the carmaker, Prime Minister Mariano Rajoy’s office said in a statement.

The maker of Peugeot and Citroen cars on Monday confirmed it had agreed to buy Opel from General Motors (GM.N) and said planned savings would come from purchasing and research and development rather than plant closures.

Rajoy spoke to Tavares on Monday shortly after the acquisition was announced, his office said, adding the conversation was constructive and that Tavares had reassured the Spanish prime minister when he asked about local jobs.

“He assured him that the company will respect in full the agreements signed between unions and General Motors,” Rajoy’s office said.

Opel has a big factory in Zaragoza, northern Spain, which is one of three plants in Europe where PSA and Opel were already working on producing cars together under an existing alliance.

PSA, meanwhile, has a factory in Vigo, on the northwestern coast, and a smaller one outside Madrid where production is running at well below capacity.

Between them the two carmakers employ around 13,000 people in Spain.

Reporting by Sarah White; Editing by Keith Weir

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