European factories at risk in PSA-Fiat merger

Some of the numbers impress.

A 50 billion dollar group, number 4 in world rankings, is promised from a possible merger between Peugeot maker PSA and Fiat Chrysler.

For car workers, others may alarm - with a combined production capacity of 14 million vehicles.

The new giant would have spare capacity of almost six million units - according to forecasters LMC Automotive - putting the two carmakers under heavy strain.

Though, when the proposed merger was announced - there was a positive response from one union spokesman over PSA's future.

(SOUNDBITE) (French) CFTC TRADE UNION REPRESENTATIVE, FREDERIC LEMAYITCH, SAYING:

"PSA is still very euro-centric , and this will allow the group to take on new markets. I'm thinking of North America in particular."

But carmaking has entered a downturn, and the expense of adapting cars to new emissions rules is forcing manufacturers to - in some cases - cut back on lower-priced models.

It could also mean - say analysts - Fiat Chrysler adopting PSA's more efficient engines.

Even, possibly, migrating onto PSA's small car platform.

All putting question marks over the future of some plants.

Talks of synergies had in any case raised alarm bells, said another union spokesman, when he reacted to the merger news.

(SOUNDBITE) (French) FO TRADE UNION REPRESENTATIVE, OLIVIER LEFEBVRE, SAYING:

"We're talking about 3.7 billion euros, so we can assume some jobs are going to be redundant, in R&D or in production. The management tells us the merger won't happen by shutting down sites, but we remain vigilant."

As for where the synergies may happen:

Europe is where product lines and investments can be combined, said one analyst.

Europe also likely, said LMC, to bear the brunt of any closures.