Peugeot in 'fruitful' talks with Merkel over Opel merger

French carmaker PSA on Tuesday said its chief executive Carlos Tavares had held a "fruitful discussion" with German Chancellor Angela Merkel over his firm's planned takeover of General Motors subsidiary Opel.

Tavares "presented the rationale to create the path for a European champion" by combining Opel with PSA'S Peugeot, Citroen and DS brands, the firm said in a statement.

The surprise announcement last week that PSA was eyeing Opel prompted fears in Germany that the prospective new owner could cut non-French jobs if the deal goes ahead.

Merkel vowed to do "everything politically possible to secure jobs and sites in Germany.

Tavares agreed to uphold existing job, investment and site guarantees and to maintain Opel as an independent company during the exchange Tuesday, Merkel spokesman Steffen Seibert said.

Opel workers have secured a jobs guarantee from the current management that runs until the end of 2018 and a pledge to continue investing in German sites until 2020, among other deals.

PSA would "respect the existing agreements in the European countries and to continue the dialogue with all parties," the French group said in a joint statement with powerful union IG Metall and the Opel works council earlier on Tuesday.

Tavares "communicated convincingly in the talks that he is interested in a sustainable development for Opel/Vauxhall as an independent company," said works council chairman Wolfgang Schaefer-Klug.

"PSA's ambition is to make the cooperation and the quality of relations with employee representatives a competitive advantage," Tavares said.

Peugeot's commitment to cooperate with employees is "an important signal" and "the basis to shape a possible merger constructively for the workers," said the head of IG Metall's central German branch, Joerg Koehlinger.

Opel operates some 10 factories in Europe spread across six countries, and had 35,600 employees at the end of 2015 -- 18,250 of them in Germany.

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.

Britain, where it sells vehicles under the Vauxhall brand, is Opel's largest European market.