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Peugeot boss: We can turn around ailing Vauxhall owner

The car boss eyeing a takeover of Vauxhall's owner has said it could help turn around the loss-making company's fortunes - but made no pledges on jobs.

Carlos Tavares, head of Peugeot (Other OTC: PUGOF - news) and Citroen maker PSA, said he wanted to create a "European champion" by buying General Motors (NYSE: GM - news) ' German subsidiary Opel and its British brand Vauxhall.

But he also suggested that the deal could see "significant synergies" - or cost savings - in language that might add to the anxiety of thousands of Vauxhall workers.

His remarks come a day ahead of the car boss's planned meetings with business secretary Greg Clark and Len McCluskey, general secretary of trade union Unite.

The proposed deal has sparked fears for the future of 3,900 employees at the car maker's Ellesmere Port and Luton plants, plus many more in the UK supply chain.

Mr Tavares said the combining of France's PSA with Detroit-based GM's European operations - which last made a profit in 1999 - would see it become Europe's number two car maker, turning out five million vehicles a year.

He said: "We believe there is an opportunity to create a European car champion, resulting from the combination of a French company and German company and without forgetting our UK friends.

"Opel has been making red ink for ten years, burning approximately one billion in cash every year.

"We believe we can help."

He said there could be "significant synergies".

"The amount of synergies and the speed at which you can implement those synergies is quite high because we have very many similar products."

Mr Tavares said the deal would be "nice to have" though "not a must", arguing that it would improve Opel's bottom line, expand PSA's market, and keep both competitive globally.

He added that PSA would respect existing worker agreements but did not explicitly rule out job cuts.

Mr Tavares has already spoken to German Chancellor Angela Merkel about the plans as well as Britain's Theresa May.

He said: "The best way… is to have unions and governments on your side."

Downing Street said after a telephone call between Mrs May and Mr Tavares on Wednesday that they had expressed a "shared desire to protect and promote" Vauxhall jobs.

PSA reported a near-doubling of group income to €1.7bn (£1.4bn), in part due to faster than expected cost-cutting.