Plans to promote the European arm of Normal Motors – together with Vauxhall – to France’s PSA Group might be derailed by the deficit in GM’s UK pension scheme, an skilled says.
Vauxhall’s pension scheme is among the largest within the UK, with 15,000 members.
Pensions skilled John Ralfe mentioned Peugeot proprietor PSA wouldn’t need to contact it “with a barge pole”, saying he thought it had a deficit of about £1bn.
Half of the members had been pensioners, Mr Ralfe instructed the BBC’s Right this moment programme.
Based on firm filings to the tip of 2014 – the most recent out there – the pension scheme had belongings of about £1.8bn however liabilities of about £2.6bn, leaving a deficit of £840m.
Since then file low rates of interest have hit the returns on authorities debt by which massive pension schemes make investments closely, so the deficit has in all probability grown, Mr Ralfe mentioned.
Final week it emerged that PSA Group, which additionally makes Citroen automobiles, was in talks about taking up GM’s loss-making European enterprise, Opel.
Mr Ralfe instructed Right this moment the scale of the deficit was a “main concern for the takeover”. “At greatest it is a stumbling block, at worst it might be a deal breaker,” he mentioned.
He mentioned he was clear that PSA wouldn’t need to tackle the pension scheme so they’d solely purchase the working belongings, together with the plant and the Vauxhall model, leaving the pensions with Normal Motors UK, he mentioned.
“The difficulty with that’s that that may then be an organization with no belongings, so what must occur… is that Normal Motors US must concern a assure for that UK firm,” he added.
PSA, which already works with GM in Europe on a number of tasks, mentioned a takeover was amongst “quite a few strategic initiatives” being thought of.
Any deal would contain Opel’s UK arm, Vauxhall, which employs four,500 workers at crops at Ellesmere Port and Luton.
Unite union chief Len McCluskey is because of meet the chief govt of PSA Group, Carlos Tavares, this week to debate the deal and any influence it may need on jobs.
Mr Ralfe mentioned he didn’t assume the Vauxhall pensioners wanted to be fearful about their place, however mentioned that whereas politicians had been “working round everywhere asking about jobs, they need to even be working round asking about pensions”.