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2017-03-06 04:27:03
Political Shifts Accompany PSA Deal to buy Opel

FRANKFURT — Turning a French carmaker and its German rival into a global auto giant would be tough under any circumstances. But the deal by PSA Group of France on Monday to buy General Motors’ Opel and Vauxhall brands for $2.3 billion has the added complexity of politics.

Political leaders, facing a rise of right-wing populism, are increasingly willing to meddle in the kind of difficult business decisions that will be necessary for the deal to pay off.

There has been a surge in government intervention in places like Italy, where bank-rescue rules have been bent to protect middle class savers. In Britain, Theresa May, the Conservative prime minister, has been talking about “an industrial strategy” — previously the province of left-wing Labourites.

Politicians have become acutely aware of how corporate decisions can create the resentments toward immigration and globalization that fed Donald J. Trump’s rise in the United States, contributed to Britain’s vote last year to leave the European Union, and nourished far-right politicians in France and Germany.

Car companies may provide particularly fertile ground for nationalist appeals. They are often entangled with national identity.

Opel, which has belonged to G.M. since 1929, is based in Rüsselsheim near Frankfurt and widely perceived as a German brand. PSA, the maker of Peugeot and Citroën cars, is 14 percent owned by the French government.

The closure of a car factory is often devastating for the surrounding community, and falls hardest on the same kind of less-educated, lower-income workers who feel neglected by elites and victimized by global finance.

“What better industry to express a view of ‘France first’ than the auto industry?” said David J. Herman, who was chief executive of Opel during the 1990s. Making the acquisition work, he said, “is going to be excruciatingly difficult.”

Adding to the political tension, France and Germany both have national elections this year. In France, Marine Le Pen of the National Front has an outside chance at winning the presidency in May. In Germany, which will hold elections in September, Frauke Petry and her party, the Alternative for Germany, are trying to win at least 5 percent of the vote, the threshold to seat a delegation in Parliament.

Ms. Petry’s party has tried to cast the sale of Opel in nationalist terms. Last month, Paul Hampel, a member of the Alternative for Germany’s national governing board, l called the deal a “sellout of German know-how.”

At a time when European unity is under threat, the sale of Opel to PSA could strain relations among France, Germany and Britain as they try to ensure that any pain is imposed in someone else’s backyard. PSA’s Peugeot and Citroën factories are concentrated in France, while the biggest Opel and Vauxhall factories are in Germany and Britain.

It is difficult to see how PSA’s takeover of Opel, which would create the second-largest carmaker in Europe after Volkswagen, can succeed without major job cuts and, probably, the shuttering of some factories. Opel has not been profitable since the 1990s, and both companies have more factories than they need. Unused factory space is deadly to a car company’s bottom line because it requires expensive upkeep without producing revenue.

“The idea is that this deal makes a strong second to VW,” Mr. Herman said, “but they’ve got to make money.”

Britain’s vote last year to leave the European Union has cast a shadow over the future of the car industry there. Vehicles exported to the European Union could face substantial duties once Britain leaves the free-trade area.

Mrs. May, the prime minister, made as yet undisclosed concessions to persuade Nissan to agree to build two new vehicles at its factory in Sunderland. British labor unions are preparing to try to block Ford from making threatened job cuts at an engine plant at Bridgend in Wales.

The British government is also focusing on the steel industry, whose fortunes are closely tied to the auto industry, after years of neglect. Plans by Tata Steel to close a blast furnace at Port Talbot were canceled after unions made concessions on pensions.

Such cases have prompted Mrs. May to speak of an industrial policy, repudiating years of Tory free-market doctrine.

The French government has backed PSA’s acquisition of Opel, since it makes Peugot a European car champion. Freed of constraints imposed by G.M., Opel may be able to establish a stronger presence in Asia and South America.

“We are proud to join forces with Opel/Vauxhall and are deeply committed to continuing to develop this great company and accelerating its turnaround,” Carlos Tavares, chairman of the managing board of PSA, said in a statement.

But the French government would certainly protest if there were any hints of further cuts by PSA in France. Amid huge protests, PSA closed a Peugeot and Citroën factory in Aulnay-sous-Bois, outside Paris, in 2013 at a time when the company was suffering severe losses.

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The French government has already demonstrated that, at least during an election year, it will intervene to protect jobs.

When Alstom tried to shut down a train factory in Belfort in eastern France, the government of François Hollande, president at the time, placed a multibillion euro order to keep the operation running.