RPT-How Spain could deliver swift savings in Peugeot-Opel deal | Reuters

(Repeats story published on Thursday)

By Sarah White

VILLAVERDE, Spain Feb 23 As the only European
country where carmaker PSA’s production overlaps with that of
Opel, Spain could deliver the quick cost savings sought by PSA
boss Carlos Tavares to convince investors to back his planned
acquisition of the rival brand.

Between them, PSA – maker of Peugeots and Citroens
– and General Motors’ Opel operate three Spanish
factories that employ about 13,000 people in total.

Production at the smallest, PSA’s 1950s-era Villaverde plant
in Madrid, is running at well below capacity.

Its dependence on only one car model has fuelled fears among
workers that its output could be absorbed by the French firm’s
larger factory in Vigo or Opel’s site in Zaragoza under a
combined group, union sources told Reuters.

“Workers at Villaverde are worried,” one source said. “This
is a space that is under-utilised.”

The union sources cautioned, however, that nothing was clear
cut because Villaverde’s productivity per worker was high
compared with elsewhere in Europe, and labour costs low.

When asked whether the plant could be closed after the
proposed acquisition of Opel, a source at PSA in Spain said it
was too soon to assess the effect of a potential deal.

The Villaverde factory has narrowly escaped closure in
recent years thanks to a contract to exclusively produce the
Citroen C4 Cactus. It is due to assemble the C4’s next
incarnation from the end of this year or early 2018.

But…

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