LUCAS workers in Lancashire are hoping to escape job losses in the wake of a planned £3.2 billion merger with American group Varity Corporation.

Union convenor at Lucas Aerospace Fabricated Systems in Burnley, Terry Burns, said most of the workforce seemed optimistic and that they had received no indications that there would be any job cuts locally.

The move, yet to be approved by shareholders, will make LucasVarity the second largest supplier of brakes to the motor industry and one of the top 10 car parts suppliers in the world.

LucasVarity will be owned by 62% of Lucas shareholders, the rest by Varity investors.

But job fears were raised by the merger announcement. The group employs almost 2,000 in its Burnley and Accrington factories, 250 at its head office in Solihull, West Midlands, and 24,700, almost half its total workforce, in the UK.

Lucas chairman Sir Brian Parse, who becomes non-executive of the merged group told a news conference: "There will be job losses in corporation headquarters and some of our administrative activities, but overall, our businesses are extremely complementary." Finance director John Grant, said: "We are not looking at large-scale job losses, particularly in this early period."

Varity's chief executive Victor Rice, who takes up a similar post at the enlarged group, told BBC 2's Working Lunch: "In the long term, the prospect is for job increases."

That view was reinforced by the engineering union AEEU. John Allen from the union said: "This can only be good news for jobs in Britain.

"We are now going to have a major automotive company that is genuinely a world-wide player, that is UK-based and with all the decisions made in the UK.

"This can only be good for future prospects.

"I do not anticipate the merger will lead to job losses on the manufacturing side."

Mr Burns agreed with Mr Allen that it was particularly good news that LucasVarity would be UK-based with Lucas shareholders holding the lion's share of the enlarged group.

Union representatives are due to hold meetings with Lucas in the next few days.

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