French Government Urging PSA To Buy Opel
The French government is pushing PSA Peugeot Citroen to buy Opel, says Le Monde, which claims to have its information from sources at the French Finance Ministry and in the entourage of France’s President Francois Hollande. Buying moribund Opel would allow PSA to stand up to “ogre Volkswagen” which “has chosen to eliminate PSA,” as an informant told the Paris paper.
Months ago, combining the hypertoxic assets of Opel and PSA was feted by Luca Ciferri of Automotive News as “a catalyst for reform of Europe’s auto industry.” That auto industry must be in an awful lot of trouble to be rescued by a malaise-merger of the equally sick.
Even a combined PSA/Opel would not reach the European sales of ogre Volkswagen. Internationally, and there’s the real rub, the duo would fall atrociously short of Volkswagen’s international machine. But that would manifest itself many years after the transaction has been completed.
Meanwhile, Le Monde wonders where PSA should get the money to buy Opel. The paper fingers the French government as the investor. It overlooks that no immediate cash would be needed. Morgan Stanley figured a year ago that Opel is worth “minus $7.6 billion,” and that GM would have to spend between $5 and 6 billion to get rid of the problem.
An Opel spokesman in Rüsselsheim called the report “pure speculation”.
Bertel Schmitt comes back to journalism after taking a 35 year break in advertising and marketing. He ran and owned advertising agencies in Duesseldorf, Germany, and New York City. Volkswagen A.G. was Bertel's most important corporate account. Schmitt's advertising and marketing career touched many corners of the industry with a special focus on automotive products and services. Since 2004, he lives in Japan and China with his wife <a href="http://www.tomokoandbertel.com"> Tomoko </a>. Bertel Schmitt is a founding board member of the <a href="http://www.offshoresuperseries.com"> Offshore Super Series </a>, an American offshore powerboat racing organization. He is co-owner of the racing team Typhoon.
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There are simply too many jokes that come to mind here and I have too little time.
Sickly company + sickly company = healthy company. If that equation worked; British Leyland, International Steel, and Studebaker-Packard would all still be alive and kicking.
Buying Chrysler seemed to work out in Fiat's favor so why not. The bigger the entity the harder it is to go bankrupt.
The alternative to an Opel-PSA marriage is a strategic bankruptcy of Opel, which would allow GM to build its cars in eastern Europe rather than in Germany and/or obtain steep concessions in exchange for retaining some production in Germany. It should be obvious that this Opel bankruptcy/ threat of bankruptcy plan is already in the works. GM is teeing it up to happen by 2014-15 if some other alternative can't be found.