German Chancellor Angela Merkel said Friday she would do everything possible to protect jobs and factories in Germany if carmaker Opel is taken over by France's PSA.
"We will do everything politically possible to secure jobs and sites in Germany," Merkel said at a joint Berlin press conference with Canadian Prime Minister Justin Trudeau.
PSA, the parent company of France's Peugeot, Citroen and DS, has confirmed it is interested in taking over Opel, the German arm of US giant General Motors.
However, the plans have sparked fears in Germany that the potential new owner could cut German jobs that doubled up existing posts in France.
The powerful IG Metall metalworking union and the Opel works council called for "unequivocal recognition and implementation of existing agreements for all Opel/Vauxhall sites, in particular commitments on employment and investments" in a joint statement earlier Friday.
PSA's interest in Opel appeared to catch both the German and French governments by surprise, with German Economy Minister Brigitte Zypries on Tuesday labelling PSA and GM's lack of communication about the talks "unacceptable".
On Friday, German Economy Ministry spokeswoman Tanja Alemany told reporters in Berlin the talks between the two firms were already "relatively advanced".
Worker representatives "are ready to hold constructive talks in case of a sale of Opel/Vauxhall," they said in their statement.
But "our objective must be to seize the existing opportunities to safeguard employment and sites," said works council chairman Wolfgang Schaefer-Klug.
Vauxhall is the brand used by Opel on its vehicles sold in Britain.
Despite their fears, the worker representatives say they "see opportunities arising from the creation of the second-biggest car manufacturer in Europe" after Germany's Volkswagen group.
"In principle, an affiliation with PSA makes sense," Opel chief Karl-Thomas Neumann tweeted on Friday afternoon.
"We are doing everything we can to shape a sustainable and successful future for Opel."
Founded in 1862, Opel, with its lightning-bolt emblem, has long been a familiar sight on German and European roads.
But in recent years, the firm has booked repeated losses, costing Detroit-based GM around $15 billion (14 billion euros) since 2000.
A sharp fall in the pound since Britain's vote to quit the EU last June sank Opel's hopes of getting back into the black in 2016, and it ended up reporting a loss of $257 million.
At the end of 2015, the firm reported 35,600 employees, including some 18,250 in Germany.
Opel has some 10 factories in Europe spread across six different countries.