Fiat Chrysler and PSA Peugeot have signed a $50bn (£38bn) deal to merge, creating the world’s fourth largest car maker.
No factories are planned to close under the deal, although the firms said they expect to make $4bn of cost cuts without disclosing where they will fall.
The lack of clarity has raised fears for the future of PSA subsidiary Vauxhall, which employs 3,000 staff in the UK, including more than 1,000 at its Ellesmere Port factory in Cheshire and a similar number at its van plant in Luton.
“Merger talks combined with Brexit uncertainty are deeply unsettling for Vauxhall’s UK workforce, which is one of the most efficient in Europe,” said Unite national officer Des Quinn when a potential deal was discussed in October.
“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.”
PSA’s chief executive Carlos Tavares warned in July that he could stop all production at Ellesmere Port if it became unprofitable as a result of tariffs and other barriers to trade introduced after Brexit.
Mr Tavares, who is expected to be named chief executive of the merged PSA-Fiat Chrysler company, said: “Frankly I would prefer to put it in Ellesmere Port but if the conditions are bad and I cannot make it profitable, then I have to protect the rest of the company and I will not do it.
“We have an alternative to Ellesmere Port.”
The two companies said the tie-up would allow them to plough investment into the “the new era of sustainable mobility”, meet tough new regulations on emissions and develop autonomous vehicles.
The combined company will become a giant of the auto industry, producing 8.7 million cars a year and generating €170bn (£144bn) in sales. Only Toyota, Volkswagen and the Renault-Nissan alliance are larger.
In a joint statement on Wednesday, the two merger partners said the new group will be led by PSA’s cost-cutting chief executive Carlo Tavares, with Fiat Chrysler’s John Elkann becoming chairman of the merged company.
Fiat Chrysler CEO Mike Manley will stay on, but it was not announced in what capacity.
No name for the new company has been decided yet and the deal is expected to close in 15 months.
Additional reporting by AP