Unite national officer Des Quinn added: 'Merger talks combined with Brexit uncertainty are deeply unsettling for Vauxhall's United Kingdom workforce, which is one of the most efficient in Europe.
The new group's Dutch parent company would be listed on Euronext (Paris), the Borsa Italiana (Milan) and the New York Stock Exchange and would continue to maintain "significant presences" in the current operating head-office locations in France, Italy and the US.
According to The Detroit Free Press, the two companies struck a deal that will see a 50-50 joint shareholder-owned entity. This should, according to auto companies, "become a world leader in an era of sustainable mobility".
Dongfeng's access to Fiat Chrysler's assets through the merger is unlikely to be a major worry for U.S. authorities, Russo said, because the Italian-American carmaker doesn't have a "high-tech profile" that would risk a transfer of strategic technology to China.
"If completed, we believe this should ignite more rational industry behavior around allocation of capital, and this particular merger makes materially more sense than a potential FCA-Renault merger", said Arndt Ellinghorst, an Evercore analyst.
French unions are already warning about job losses, and angry that they were not informed of the discussions.
The reported merger would come about four months after FCA walked away from merger talks with Renault. That includes Chrysler and Dodge, Alfa Romeo and Fiat, Jeep and RAM, Maserati, and the Mopar and SRT tuning brands from the FCA side.
The deal comes after a similar merger plan between Fiat Chrysler and French automaker Renault fell apart in June.
Citi analysts said the cash payout for FCA shareholders contrasted with the Faurecia shares, worth about €2.7bn at Wednesday's close, being offered to PSA shareholders, saying the latter were "being asked to remain patient".
This is the second attempt by Fiat-Chrysler to merge the non-German European champions in Europe, creating a Franco-Italian conglomerate with global outreach.
The deal with PSA would give Fiat Chrysler access to PSA's newer vehicle platforms in Europe as well as emerging technologies.
But others expressed fears for jobs with 'workers pitted against each other, ' Jean-Pierre Mercier, a CGT delegate, warned.
Prof David Bailey, from the Birmingham Business School, told the BBC he was concerned about the prospects for Vauxhall's Ellesmere Port factory.
A combined FCA-PSA would produce the scale needed in an industry facing slowing demand, with 8.7 million vehicles sold per year and 184 billion euros in annual sales.
"The Chinese government doesn't want to have a strong connection with an American company", Dudenhoeffer said, due to economic damage brought by the Trump administration's tariffs.