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In increase for Britain, Peugeot to construct new van at Vauxhall plant

LUTON, England (Reuters) – Peugeot-maker PSA (PEUP.PA) has unveiled plans to boost output at its British Vauxhall van plant, in a pre-Brexit present of confidence that can elevate strain on sister model Opel’s German workforce to supply concessions in labor talks.

PSA, which final 12 months acquired Opel/Vauxhall from General Motors (GM.N), will construct Peugeot and Citroen fashions in addition to the following Vauxhall Vivaro van in Luton, north of London. Production will rise to 100,000 autos from 60,000 in 2017.

The French group, which is locked in labor talks with Opel’s German employees, mentioned the Luton funding was helped by “responsible social dialogue with the Unite union guaranteeing production flexibility”, in addition to UK government help.

The union mentioned 350-400 jobs can be created on account of the funding, which PSA mentioned would quantity to about 100 million euros ($123 million). Around 1,400 individuals are at the moment employed on the web site, which is Britain’s solely van plant.

The announcement is a lift to Prime Minister Theresa May forward of talks to determine Britain’s long-term buying and selling relationship with the European Union, though PSA Chief Executive Carlos Tavares underscored the necessity without cost commerce.

“I take on board the assurances that the UK government have provided us on seeking tariff-free and frictionless trade with the EU going forward,” he mentioned on the plant on Wednesday.

“There is still work to do to ensure frictionless trade.”

The Vivaro, which at the moment shares underpinnings with Renault’s (RENA.PA) Trafic van, will in future be assembled on PSA’s EMP2 car platform.

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That will permit manufacturing of the Peugeot Expert and Citroen Jumpy to be launched in Luton, the group mentioned, confirming an earlier Reuters report.

After rescuing PSA from near-bankruptcy in 2013, Tavares is negotiating new union offers for Opel/Vauxhall as he pursues an formidable restructuring plan designed to revive the division’s profitability by 2020.

Raising strain on Germany’s IG Metall union, the division’s German CEO Michael Lohscheller underlined that new offers had now been struck with employees in Britain, Spain, Austria, Hungary and Poland, permitting funding of their websites.

The newest UK funding safeguards the Luton plant’s future for “many years to come”, Lohscheller mentioned on Wednesday.

PSA mentioned it wanted to spice up van output to fulfill rising demand however might wait till 2020 to determine on future automotive manufacturing at its Ellesmere Port manufacturing unit in northwest England, the place the run of its present Astra Sports mannequin doesn’t finish till the following decade.

The British government is contributing 9 million kilos to the van funding as a part of its push to help the UK automotive business, which employs over 800,000 folks and generates income of 77.5 billion kilos ($110 billion).

Reporting by Costas Pitas; Writing by Laurence Frost and Costas Pitas; Editing by Mark Potter


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