German government must help in Opel dispute, Merkel says

German Chancellor Angela Merkel said she expected PSA Group to stick to the commitments it made during its takeover of Opel last year and that her German government felt it had to help.

The future of Opel’s Eisenach factory in Germany hung in the balance on Monday after shop stewards rejected wage concessions demanded by PSA in exchange for a commitment to invest in a production line for a new model there.

“The German government, along with the regional government, feels obliged to do its bit to help,” Merkel said on Wednesday. “These discussions are ongoing but I can’t say anything about the results yet.”

PSA said in February 2017, before buying the European arm of General Motors, that it would uphold job guarantees at Opel and Britain’s Vauxhall, offering reassurance to both Merkel and unions at the German automaker.

Analysts said at the time it would be tough to keep that promise and, with Opel still losing money, management had pressed union leaders to forgo a 4.3 percent pay rise this month to create enough leeway for further investments in Germany.

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