By on February 29, 2012

When the stock markets close in Europe today, PSA Peugeot Citroen and GM should announce that they are going ahead with the plan of GM buying seven percent of PSA. That according to “sources with knowledge of the discussions” that talked to Reuters.

GM and Peugeot will pool R&D, vehicle platforms and technologies, Reuter’s sources say. PSA hopes to save $2 billion in 4 years through the deal. What GM is hoping is anybody’s guess.

In the morning, The Detroit News reported that Sergio Marchionne also would not mind taking a stake in PSA. Depending on how that announcement is coming along, all Sergio can do is stand and watch while GM and PSA are doing the alliance.

 

PS: After the close of the market, the deal was announced.

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24 Comments on “PSA And GM Are Doing It While Marchionne Watches...”


  • avatar
    sitting@home

    Haven’t PSA seen what happened to the last company (Saab) who tried to “pool R&D, vehicle platforms and technologies” with GM ?

    • 0 avatar
      Sinistermisterman

      PSA are a slightly larger affair than Saab being the 2nd largest auto maker in Europe, and 8th in the world. Saab was a minnow in a fish tank full of whales by comparison.
      As per the other comments below, this could work on paper with sharing of R&D, platforms and other ‘synergies’ (I hate that word). Even so, investing in another auto maker which is centered in a very crowded market such as Europe – especially since GM still haven’t solved their Opel problem, makes me a bit cautious.

    • 0 avatar
      Volt 230

      GM refuses to learn from past mistakes.

  • avatar

    LOL at the title

  • avatar
    alluster

    “What GM is hoping is anybody’s guess.”

    From NYT : “….the partnership to produce limited benefits in the first two years but annual savings of about $1 billion for each carmaker within five years.”

    GM will shed staff, close plants at its EU operations and utilize some of PSA’s excess capacity. PSA is already closing their Aulnay plant. This could get their capacity utilization to near 100%.

    By sharing each others platforms, engines, designs and purchasing they can increase their individual economies of scale, consolidate EU operations and co-develop and share costs of new platforms, engines and parts. Will give GM access to much needed expertise in small cars, diesel and advanced stop/start tech (PSA has arguably the best system on the market) which is a must in Europe and will soon become one in the US. Also, the 7% stake could net GM a profit once the EU economy improves.

    The plan works great on paper, but we all know how productive GM’s past alliances have been. It will be interesting to see if the savings materialize for GM and how much power they will have over PSA as the second largest shareholder. I still believe GM should instead have formed alliances with automakers in emerging markets where all the action will soon be.

    Lol @ Sergio trying to c*** block this deal.

    • 0 avatar
      Pch101

      “By sharing each others platforms, engines, designs and purchasing they can increase their individual economies of scale, consolidate EU operations and co-develop and share costs of new platforms, engines and parts.”

      You may be onto something. Here’s some official commentary on the subject:

      ” ‘These synergies will help each of us formulate our brands,’ a General Motors spokesperson told reporters in a conference call. ‘We want to work together to reduce our cost structure by generating synergies. So far we’ve seen significantly opportunity to reduce costs and we think that’s absolutely necessary in order to compete in this global arena.’….The alliance will include a joint venture centering on car engines and components and joint investments in Europe, where GM owns Adam Opel and its British unit, Vauxhall. PSA also may take part in GM’s planned online auto-parts exchange Internet venture.”

      Sounds like a good idea, really. Who can argue with that?

      OK, so I fibbed a little. The excerpt above is from a slightly reworded article that announced GM’s deal with FIAT in 2000. Oops.

      http://money.cnn.com/2000/03/13/worldbiz/gm_fiat/

  • avatar
    cmoibenlepro

    I don’t get it. GM has idling plants in its Opel division, why would it want Peugeot production?

    • 0 avatar
      Lorenzo

      What GM does with Opel has got to be part of GM’s thinking. Just what that thinking is, I dunno. The shared R&D part of the deal kind of hints at a reduction/replacement of Opel’s role, with an emphasis on smaller cars, maybe for export?

    • 0 avatar
      cronus

      It depends on what they want to build with Peugeot; Opels or Chevys? If GM can establish a profitable Chevrolet in Europe they can let an unprofitable Opel die.

  • avatar
    vanpressburg

    Buying seven percent of PSA is bailing out Europe using US taxpayers money.
    Greece is in bankruptcy, Spain and Portugal very close and Italy and France in big trouble.
    When these countries start to fall now, recession in Europe would cause recession in USA and Obama will not be reelected!

    President Obama wants to bail out Europe using US taxpayers money.
    http://danieljmitchell.wordpress.com/2011/10/11/no-more-bailouts-for-the-imf/

  • avatar
    lw

    Thank goodness. I was going to buy GM stock, but after reviewing their situation, I determined that they needed significantly more complexity before I invested.

    That’s really been GM’s problem all these years.. Nowhere near enough complexity across the board. More business ventures, more models, more options, more discount programs, more vehicle lines..

  • avatar
    minneapolis_lakers

    Sergio has this outsized ego with grand ambitions of a global auto empire.

    There is just one problem:

    Fiat doesn’t have any money to buy anyone. Heck, they don’t even have the funds to buyout the remaining Chrysler stake.

  • avatar
    sco

    Oh my god, does this mean I can get parts for my 504 at the local Chevy dealer? If so, I’m all in!

  • avatar
    Spike_in_Brisbane

    “By sharing each others platforms, engines, designs and purchasing they can increase their individual economies of scale”

    Can you imagine a Buick based on the Citroen C5 hydro-pneumatic chassis? Awesome!!!

  • avatar
    forraymond

    Reducing platforms, like VW has done makes sense. One small and one large platform for Chevy, Buick, Opel, Peugeot could save a lot of money. One luxury platform for Cadillac and Citroen, done (except for the Asian arm of GM).

  • avatar

    can someone tell me how much the investment banks are being paid for this deal on both sides? it’s the same charade as when they stripped GM of cash as the banks took enormous fees for “advice” in NOT buying Nissan and Chrysler, let alone the billions siphoned off during the Fiat Fiasco. this corporate shell game is nothing more than a high level white collar con, you know the stuff guys named Bernie are famous for…Madoff and Ebbers.

  • avatar
    Andy D

    other than Opel, what other presence does GM have in Europe

  • avatar
    coach bryant

    “PS: After the close of the market, the deal was announced”

    i think that says a lot.

    (if they were really smart, they’d have waited ’til the weekend. of course they may have wanted to but had to stay ahead of the crack staff here at ttac!)

    they missed the suv boat in china and now jump in the europe end of the pool.

    have to give it to the union brass running things now.

    smart cookies.

  • avatar
    Omnifan

    Simply brilliant Sergio! The man is a genius!!!

    If GM was the only one interested in Peugeot, then the price would have been cheap. Enter Sergio. He doesn’t want it, but why not sucker your competitor into thinking you do. Bid the price up, make them hurry and sign up. Then sit back and laugh as the whole thing goes fubar. Didn’t that happen between Ford and GM on Jaguar? But then, GM snatched defeat from the jaws of victory by buying SAAB.

    What’s not to like?

    • 0 avatar
      windswords

      “Didn’t that happen between Ford and GM on Jaguar?”

      I remember that and was thinking the same thing. Bid the price up and then capitulate. Reminds me of the Dave character on “Storage Wars”!


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