Fears for 1,000 UK jobs as Peugeot and Vauxhall confirms merger with Fiat Chrysler

PEUGEOT and Vauxhall are set to merge with Fiat Chrysler making it one of the world's biggest auto manufacturers in the world.

But the amalgamation has sparked fears that more than 1,000 jobs at Vauxhall's Ellesmere Port could be at risk.

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PSA Group, the French parent company which owns Vauxhall and Peugeot, confirmed today it would go into a 50-50 merger with Italian-US company Fiat Chrysler.

The two sides are yet to finalise specifics of the deal, but the combined company is thought to be worth £40billion.

The partnership would make the automaker the fourth biggest in the world, with annual sales of 8.7million a year.

PSA boss Carlos Tavares, who is expected to be the chief executive of the merged company, said: ";This convergence brings significant value to all the stakeholders and opens a bright future for the combined entity."

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The company said plans to make annual savings of £3.2billion through the partnership were "not based on any plant closures".

The move would allow the automakers to make massive savings from a "more efficient allocation of resources for large-scale investments in vehicle platforms, powertrain and technology".

But union leaders fear the change could lead to job cuts at Ellesmere Port, which employs 1,000 production workers.

Des Quin, national officer at Unite, said: "Merger talks combined with Brexit uncertainty is deeply unsettling for Vauxhall's UK workforce which is one of the most efficient in Europe.

"The fact remains, merger or not, if PSA wants to use a great British brand like Vauxhall to sell cars and vans in the UK, then it has to make them here in the UK."

He is now calling for an urgent meeting with PSA bosses.

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David Bailey, a professor from the Birmingham Business School, told the BBC: "I have a real fear that if this merger goes ahead the likes of Ellesmere Port, which is a very efficient plant, could be sacrificed to get the sort of savings the company is looking for, especially in all the uncertainty over Brexit."

The move comes after PSA boss Carlos Tavares threatened to move construction to southern Europe if Brexit affected trading.

If the factory was closed, it would leave the Luton factory as Vauxhall's last production line in the UK.