By on October 13, 2012

Yesterday, La Tribune in Paris had it on good authority that moribund Opel and the carmaking arm of PSA Peugeot Citroen would be merged into a joint venture.Reuters started digging a bit deeper and can say with conviction that “General Motors and PSA Peugeot Citroen are exploring ways to combine European operations in a second phase of the carmaking alliance they forged to save costs earlier this year.” They just don’t know yet how.

Reuters heard from three sources that the original alliance deal in which GM became PSA’s second largest shareholder after the Peugeot family was meant as phase one of a bigger deal: Combine Opel and PSA, one way or the other.

There are several ways to do that. According to Reuters’ sources, the options are “selling Opel to Peugeot, buying Peugeot’s automotive business or putting them all together in a new entity.”

GM paid 320 million euros for a 7 percent stake in Peugeot. Whatever the deal will be, it will cost more money. Both companies come with huge obligations, and closing factories is very expensive in Europe. The 7 percent share already lost a lot of its value.

Neither automaker wanted to comment on the rumors, but nobody denied them outright. “We haven’t commented on previous reports and we’re not going to on this one,” Peugeot spokesman Jonathan Goodman said. GM spokesman Selim Bingol said in an emailed sibyllinic statement: “We don’t comment on speculation. We are focused on earning the benefits from our alliance with PSA that we have identified.”

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43 Comments on “PSA And Opel To Be Married, One Way Or The Other...”


  • avatar

    Reuters is “digging”? that’s a joke when you consider who owns Reuters.

  • avatar
    el scotto

    Why is Thomson Reuters a joke? I’m not the least bit shocked a communications conglomerate owns a wire service. Does Al Jazeera need to get involved because of the Arab workers?

    • 0 avatar

      same owners as AP. the populace buys into, and believes, what they are fed, not me. I like this site… it’s open, diverse, and informative in spite of the blind followers and company stooges. it’s technical, detailed, and for the most part unabashed.

      • 0 avatar

        I know a few Reuters reporters, we share the same beat. I know them as professional, hard working, knowledgeable, and most of all incorruptible. When it comes to cars (that’s the only field where I dare to have an opinion)they are the best in an otherwise deteriorating business. It helps to have a Paul Ingrassia as Deputy Editor-in-Chief, he won the Pulitzer for his GM coverage.

        I don’t think Thomson owns AP. AP is a coop. I know the Reuters reporters as fierce competitors of AP.

      • 0 avatar
        Pch101

        Reuters is owned by Thomson Reuters, a Canadian media conglomerate.

        AP is a cooperative owned by various American media outlets that contribute to it and trade content with each other, while selling the content to overseas markets.

        There is no ownership connection.

      • 0 avatar

        AP and Reuters are both owned and controlled by the Rothschild family. you hear and read what they want you to know and influence you to believe, whether it’s the fallacy of 9/11 or weapons of mass destruction. the auto business, though less serious, is also a playground for international banking interests hellbent on lowering costs and skimming cash. that is all.

      • 0 avatar
        Pch101

        “AP and Reuters are both owned and controlled by the Rothschild family. you hear and read what they want you to know and influence you to believe, whether it’s the fallacy of 9/11…”

        It seems that some of you have taken The Protocols of the Elders of Zion a bit too seriously.

        With the Rothschilds rhetoric, you’ve now crossed the line into the wacky world of anti-Semitic conspiracy theory. Admittedly, including the homage to the oddball 9/11 “truth” movement was a nice touch for what is purportedly a car blog.

      • 0 avatar

        not really. simply refuse to blindly accept nonsense.

      • 0 avatar
        Pch101

        So the Jews own the media and the banking system. Er, right.

        In that case, is there a way that I convert to Judaism? I’d like to own a bank and maybe a radio station. Obviously, you have it all figured it out, so perhaps you have some advice about how to sign up.

      • 0 avatar
        el scotto

        http://en.wikipedia.org/wiki/Associated_Press So, the Rothchilds control all 1700+ newpspapers and 5,001 TV and radio stations? http://en.wikipedia.org/wiki/Reuters. Reuters was bought by Tomson and has even been accused of anti-Israeli bias. What about the Arab media that report almost the same stories as their European and American counterparts? Exactly who are the Rothchilds? The banking family of the same name has been fairly ineffective since WWII with the shift of financial markets from London to New York?

      • 0 avatar

        the Devil’s greatest trick is making you believe he doesn’t exist. the Rothschilds aren’t Jews, they’re Zionists. big difference.

      • 0 avatar
        Pch101

        Yeah, that “Zionism” reference makes this theory of yours sound a whole lot less anti-Semitic. Not.

        This thread is getting nuttier by the minute. Here’s something that’s not so nutty:

        http://www.adl.org/special_reports/control_of_fed/fed_rothschild.asp

      • 0 avatar
        dash riprock

        Ken Thomson was canada’s richest man before his death last decade. His family used to own a lot of newspapers here and in the UK. made the decision to shift into the digital information world and sold the papers. They are WASP’s personafied, as far from Jews as possible.

        Buickman I used to chuckle at your posts saying the only thing wrong with GM was its marketing. Now with this jewish conspiricy stuff I find nothing funny anymore, just distasteful

      • 0 avatar
        el scotto

        Are you saying “The Rothchilds” of the banking banking family who were Jewish have morphed into a family that has quit being Jewish and are now Zionist? Never mind the foundation of Zionism is to defend Jews? You never have told us who these Rothchilds really are, other than Zionists.

      • 0 avatar

        this is an auto website so let’s just leave it that my point is to not fall for the media’s bias and to consider the source. dig deep to find the truth and you may just be surprised at what you’ll find. politics and things like 911 truth, CFR, and international banksters are for another venue.

      • 0 avatar
        th009

        Buickman, you have just lost a whole lot of credibility, at least in my eyes. Blaming the Opel-PSA news (among other things) on Rotschild conspiracy … right.

        It’ll take a long time before I can take your posts seriously again.

    • 0 avatar
      el scotto

      Not only NO, but hell no. You have brought up a subject many find distasteful, or worse. You do not understand that Zionism and the Jewish religion are deeply intertwined. You then say major media is nonsense and secretly controlled by “The Rothchilds”. We never did get a description from you on who “The Rothchilds” are. Then you try to say “Oh my bad” all that is really for another venue. No.
      I lost a friend on 9/11 and I’m not the only one. I don’t care how many cockamamie, malarkey sourced conspiracy theories you believe in; the planes still crashed and people died.
      I’m meeting a bunch of Navy buddies for drinks tonight on the Navy’s birthday. We might get drunk enough to sing “Anchors Aweigh”. We WON’T be singing the “Horst Wessel Song”. I’m done.

    • 0 avatar
      rnc

      Despite its name and the assumptions that go with it “Al Jazeera” provides some of the most unbiased “World” news out there, especially in comparison to quite a few “western” reporting agencies.

  • avatar
    schmitt trigger

    What is the relationship between European automotive woes and a wedding brawl?
    I don’t know but sure the video was hilarious!!
    +1 on the entertainment.

  • avatar
    Lampredi

    So should the European competitors rejoice or start worrying as a result of this?

  • avatar
    Dimwit

    It’s clear that GM bought into PSA with an agenda. They didn’t care what the price was or potential value they just needed a place at the table.

    This merged entity will end up holding the can for all the plant closures and layoffs. The biggest sticking point that I can see is for GM to get away from any legal liabilities when this happens. It’s obvious this is much harder in the EU than anywhere else since they’ve been at this almost 2 years now. I’m quite sure the other manufacturers are egging them on to just get it done already.

    • 0 avatar
      th009

      There is no legal problem with shutting down plants. Politically it’s a huge issue, though. A joint venture will be less easily pushed on this issue by German, UK or (especially) French governments.

      • 0 avatar

        There may be no legal problem with shutting down plants (unless you are Opel and have a contract that prevents you from shutting down plants through 2014). However, there is a problem with firing people/ It can become very costly if they have worked for you for a while. Closing Antwerp did cost approx $200,000 per head. I don’t see how any of the options would solve that,

      • 0 avatar
        rnc

        If GM and PSA (automotive) merged, throwing in PSA bank, would not GM have a captive financing arm again, at a significant discount, vs. building one from ground up or purchasing one (Don’t think GM is in position to issue the bonds to fund a full financing arm at this point (or even near)?

  • avatar

    “They just don’t know yet how.” I wouldn’t know either.
    Aside from the fact that both Opel/Vauxhall and Peugeot/Citroen could certainly need better sales to come out of the red these companies have nothing in common.
    For me that looks like a new Saab-like adventure on a broader scale. It would take forever to achieve those famous “synergies”.

  • avatar
    SherbornSean

    You’re right about one thing, Buickman, this is not the place for wacky conspiracy theories. It’s not the place for spreading the kinds of rumors that get millions of people murdered. It’s not the where you write a pack of lies designed to disempower and destroy people with different beliefs.

    I am all for free speach, but not the spread of racist propaganda.

  • avatar
    pista

    Excuse the off-topic, but I have no strong opinions on religion. I think the new 208 is a great direction for Peugeot and I hope the family knows what its doing getting tied up with GM. It’d be a great pity if it was the last Pug.

  • avatar

    How is this alliance going to fix the number one cause of losses, overcapacity? GME and PSA could save money on development costs, gain purchasing power and offset some of the losses due to overcapacity. Save as much money as possible until contracts expire that allow both companies to better align production with demand. Merge Opel/Vauxhall with PSA. Shut down the Opel headquarters and fire everyone except the engineers. Close the Bochum plant. Close one of PSA’s plants in France. Let the JV take care of developing, designing and marketing all future models. PSA will supply the transmissions, super efficient 4 cyls and diesels. Opel will supply the platforms. Use the new purchasing power to negotiate lower with suppliers and transit companies. All of PSA’s future platforms will come from Opel. GM will give PSA access to China, India and US. The Peugeot 4008 will make a great Buick Rendezvous both in the US and China.

    http://www.flickr.com/photos/nrmadriversseat/7182543311/lightbox/
    http://www.caradvice.com.au/wp-content/uploads/2012/05/2012-Peugeot-4008-Review-05-625×416.jpg

    Bring the DS3 as a Mini/Fiat 500 fighter. Closing plants is not going to be easy for either of them esp with the new socialist govt in France. Lets give them both props for trying rather than sit back and do nothing.

    • 0 avatar
      Pch101

      “How is this alliance going to fix the number one cause of losses, overcapacity?”

      Opel’s problem is not one of overcapacity. Its problem is that it has an undesirable brand, which results in low demand for its cars. As a result, GM Europe has low revenues per unit that can’t cover operating expenses.

      The European car market, particularly Germany, is dominated by the company car market. Opel is not well positioned to take advantage of that market, since it has no luxury vehicles to appeal to the executives who dictate which automakers will win the corporate fleet business. Opel would have to make considerable changes and improve its positioning over a period of several years if it is to change this.

      An automaker in Europe has two basic options: either gun for the company car business by going upmarket, or else sell into the budget market that is less dependent upon the company car business. Opel has done neither, which leaves it in limbo somewhere in between.

      Since GM won’t invest enough time and resources to move it upmarket, a crash landing is probably inevitable. So they may as well as attach Opel to PSA, so that the French government will be more likely to want to bail out this larger enterprise. The French can then, in turn, lean on the Germans in order to gain their support for a mutually beneficially bailout package that serves both the French and German facilities of PSA-Opel or whatever it’s called. When the two leaders of the EU want that to happen, Brussels will find a way to make that happen.

      • 0 avatar
        th009

        Overcapacity is what you get when your sales are lower than your capacity. To fix it, either you can reduce capacity (technically easy, politically difficult) or increase sales (difficult to do profitably in the short term without significant new product). So the two are really linked.

        You are correct about the large number of company cars, especially in Germany and the UK. However, the vast majority of the drivers of those cars are far from “executives”. For example, all the account managers (ie sales reps) at our German subsidiary have company cars, as far as I can tell.

        In the end, it’s about having desirable product, whether in the premium segment or in the entry-level segment.

      • 0 avatar
        Pch101

        “Overcapacity is what you get when your sales are lower than your capacity.”

        In this context, “overcapacity” is a euphemism for having too much production capacity for a declining market. It’s a way of blaming market conditions, rather than bad product or mismanagement, for the inadequate sales.

        The problem for companies such as Opel is not a declining market, but the lack of pricing power. Reducing Opel’s capacity will not make the division profitable, as reducing output does not address the problems that arise when cars are sold for less than it costs to make them.

        “You are correct about the large number of company cars, especially in Germany and the UK. However, the vast majority of the drivers of those cars are far from “executives”.”

        In countries such as Germany, employees typically are limited to one automaker’s offerings.

        The company car schemes also most heavily favor executives, who get the greatest tax benefit from having the cars.

        If the executives want VAG vehicles, for example, then everyone else below them is probably also going to have their choices limited to VAG vehicles, due to how these fleet arrangements usually work. Since executives will be determining which automakers get preference, their preferences will impact everyone else in the company who is eligible for a car.

        The senior staff want luxury cars from credible brands, and Opel will not be on many of those lists. And since GM doesn’t have anything desirable to offer those executives, their underlings won’t be driving GM cars, either. The result — GM doesn’t lease cars to any of those employees, including some lower wage employees who might actually want one if given the choice.

      • 0 avatar
        th009

        Reducing capacity would help with the financial situation as you would not be paying for people and plants to sit idle. Certainly not the only issue, I agree.

        In the long term they need more desirable products if they want to have that pricing power. But Marchionne hasn’t clued into that, either, as he has put the brakes on product development at Fiat.

        With regard to executives making decisions about the company car fleet supplier, it may not be quite as clear-cut as that. Surely the senior management has some influence — but a bigger factor may be that VW can offer a full range of models from the Polo (or Up!) to the A8, something that others cannot do. Ford tops out at the Mondeo and Opel at the Insignia. BMW and MB don’t go far enough downmarket. (Offering ATS and CTS in Europe may somewhat mitigate this issue for Opel.)

      • 0 avatar
        Pch101

        “Marchionne hasn’t clued into that, either, as he has put the brakes on product development at Fiat.”

        He doesn’t have enough money to do otherwise.

        “With regard to executives making decisions about the company car fleet supplier, it may not be quite as clear-cut as that”

        If the boss man has his heart set on an AMG, you can bet that the fleet purchases won’t be going to Opel or to anyone else. He’s not going to care that his secretary prefers a Corsa or his financial analyst wants a Mondeo. It’s the Golden Rule — he who has the gold gets to make the rules.

  • avatar
    Andy D

    Wedding brawls are popping up all over. I don’t get a paper any more. I come to TTAC for the automotive version of the “Irish sporting pages” Mebbe the excess capacity of such a marriage could be used to build SAABs ? ;)

  • avatar
    BigMeats

    So…. did Buickman get tased?
    Is there a video?

  • avatar
    28-Cars-Later

    Zionism to my understanding was always a political idea mutually exclusive of religion. Perhaps this is inaccurate I’m not sure, and if it is, it is an inaccuracy shared by two different people who have never met and more than likely grew up in completely different places.

  • avatar
    el scotto

    Zionism (Hebrew: ציונות‎, Tsiyonut) is a form of nationalism of Jews and Jewish culture that supports a Jewish nation state in territory defined as the Land of Israel.[1] Zionism supports Jews upholding their Jewish identity and opposes the assimilation of Jews into other societies and has advocated the return of Jews to Israel as a means for Jews to be liberated from anti-Semitic discrimination, exclusion, and persecution that has occurred in other societies.[1] Since the establishment of the State of Israel, the Zionist movement continues primarily to advocate on behalf of the Jewish state and address threats to its continued existence and security. In a less common usage, the term may also refer to non-political, cultural Zionism, founded and represented most prominently by Ahad Ha’am; and political support for the State of Israel by non-Jews, as in Christian Zionism. http://en.wikipedia.org/wiki/Zionism, 1st paragraph.

  • avatar
    panzerfaust

    This keeps sounding more and more like a marriage I saw many years ago… Studebaker-Packard.


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