By on January 8, 2013

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”.

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35 Comments on “French Government Urging PSA To Buy Opel...”

  • avatar

    I love it. All those Opel workers get to keep their jobs. Good luck with that, guys.

    However, what would this do to GM’s presence in Europe? Would it pretty much zero it out? Does Vauxhall go along with Opel? What’s Chevy’s presence like?

    • 0 avatar

      I don’t see how Vauxhall could be easily separated, all it’s models are rebadged Opels and the vast majority are built in Opel plants. The only ones that aren’t are the Astra and Vivaro, made at Ellesmere Port and Luton, respectively, which also build RHD Opel-badged versions.

      I suppose GM could keep the rights to the brand and work out an agreement with PSA to continue supplying cars for it until the end of the current product cycle, and then ?.

      Chevrolet has made some inroads, partially at the expense of Opel and Vauxhall’s cheaper, higher volume models, but it’s still not that big of a player in the scheme of things. Ditching Opel would turn GM into a bit player in Europe.

      In the short term, it seems like a great idea – ditch a multibillion dollar liability in the midst of an international Great Recession. But, long-term, the economy will improve eventually and Europeans will eventually go back to buying cars, and, if GM ditches Opel now, they would have any cars to sell them when things do turn around.

  • avatar

    This is where the MMQB comes to mind. Isn’t this a European version of the speculated-on Packard Hudson Studebaker Nash merger? May as well go all-in. I understand their thought process, which should worry them. Broke is broke.

  • avatar

    Looks like I’m going to have to buy Peugeot S.A. and have them start production in some place like the Czech Republic, Poland, Kentucky or Mexico if I’m ever going to get my Citroën C6 (or I’ll settle for a C5, even) stateside.

    What an expensive solution to my vexing problem. I’m quite vexed.

    And then, to add insult to injury, I won’t have any money left over to implement a plan to get a Škoda Yeti!!!

    …shit’s getting expensive, yo!

    • 0 avatar
      Athos Nobile

      Why would you like to buy any of those overinnecesarilycomplicated things?

      I don’t see what you find special in a jacked up Roomster either. Maybe that it is a funky looking CUV?

      • 0 avatar

        The Citroën C5 and C6 (especially the C6) offer the kind of truly creamy ride quality that are missing in just about every other modern production car.

        Michigan roads tend to suck, and having the frost heaved expansion joints and potholes tamed by that legendary Citroen ride quality would be a true luxury.

    • 0 avatar
      Adrian Roman

      I’m afraid I’ve got bad news for you – C6 production ended in December 2012

  • avatar

    So after this all falls apart in say five or so years, the French gov’t will be left holding the bag?

    This feels like MG Rover all over again.

    http://en.wikipedia DOT org/wiki/MG_Rover_Group

    • 0 avatar

      The French government came out OK after buying most of Renault a while back, but PSA appears to be in worse shape. That is too bad. I rather liked the C4 I rented a few years ago in Luxembourg, and like some of their other products.

  • avatar

    The story itself is probably nonsense, at least as written.

    The more interesting story would be who fed this to the media and why.

    I keep getting the sense that some sort of deep game is being played with Opel. I don’t quite get it yet. But Girsky is no dummy.

  • avatar

    This has been up an hour already and not one joke about how well the Germans and the French have gotten along historically.

  • avatar

    So GM is going to sell the R&D part of Opel to PSA? The parts with all their hybrid tech?

    nein! nein! nein!

  • avatar

    It’s not that “orge Volkswagon” that has decided to eliminate P-C, it’s the world market. Make a better product and you’ll see more sales.

  • avatar

    good point moedaman – also one loser company buying another loser company does not a winner make

  • avatar

    All this is pure French wishfull thinking which Bertel is delighted to feed given his well known anti-GM / Opel bias and strong defense of his former employer VW. The truth is that GM does not have at all any interest whatsoever to get rid of Opel, as Opel is a key element of its presence in Europe which Chevrolet would need many years to fill in. Furthermore Opel is not losing more money in Europe than most competitors, including VW which does not dare to publish its European results. In summary, Opel will stay with GM much for the regret of Bertel and PSA will continue working with GM /Opel in exploiting their alliance…Nothing new under the sun!

    • 0 avatar

      I really doubt that:

      In 2011, VW (the brand, not the group) sold 3.38 million cars and made an operating profit of 3.8 billion euro. All numbers exlude China, since chinese profits are not counted in operating profits.
      Of those 3.38 million cars, 1.72 million were sold in Europe.

      Assuming that in Europe, VW had the same overall losses as Opel (i.e. ~600 million Euro), they would have needed to have a profit of 4.4 billion Euro with just 1.66 million cars in the rest of the world (or about 2.650€ per car).

      Thats not only very impropable, but basically impossible. We’ll have to see how 2012 went, but for 2011, even though VW doesn’t release numbers for each country, they must have been profitable in europe…

  • avatar

    There are simply too many jokes that come to mind here and I have too little time.

  • avatar

    Sickly company + sickly company = healthy company. If that equation worked; British Leyland, International Steel, and Studebaker-Packard would all still be alive and kicking.

    • 0 avatar


      Here are some random, goofy, irrational thoughts, based on your formula. Have fun – – –

      I) Suppose we have Sick Co A and Sick Co B. If neither has a unique virtue, then adding the two together just makes a larger and MORE Sick Co C, the result of the merger.

      This is like: (-1) + (-1) = -2. So adding two ailing, non-unique companies to one another simply makes things worse. No surprise there. And that is likely the Opel + PSA situation.

      II) BUT, if we have Sick Co A and Sick Co B, in which each has a unique virtue or strength, as well as an opposite weakness, then the strength of the first can cancel out the weakness of the second, and vice versa.

      This is maybe like: (-1) x (-1) = +1. So combining companies under those conditions is a multiplier, and can at least yield one larger, mildly healthy company. An example might be Fiat * Chrysler.

      I guess it all depends on which category the “merger participants” fall into. And there is, of course, the takeover by a healthy company to rescue and profit from a sick one. Perhaps BMW * Mini might be an example. Both seem to be stronger as a result.

      But this is all getting a bit abstract, and its time to go to bed…. (^_^)..


  • avatar

    Buying Chrysler seemed to work out in Fiat’s favor so why not. The bigger the entity the harder it is to go bankrupt.

    • 0 avatar

      Right, fiat bought chrysler.

    • 0 avatar


      I am not sure that Chrysler did not benefit enormously from the deal as well. Here’s why:

      1) For the first time in “recent memory”, they got a dynamic leader: Sergio Marchionne;
      2) Chrysler was saved from the final conclusion of a bankruptcy court, namely dissolution;
      3) Chrysler was given a quick avenue and platform for a new small car, the Dart;
      4) Chrysler had Sergio’s support to move on the RAM truck, and now the 2013 RAM 1500 has achieved “Truck of the Year” status from “Motor Trend” magazine. It features a car-like air suspension and can get 25 mpg;
      5) There is a revamped and regenerated Chrysler 300 top-of-the-line sedan;
      6) Sergio gave a “go” for the new SRT Viper, calling it the most beautiful car he ever saw;
      7) Chrysler has instant access to sell the Fiat 500 and Abarth in its show rooms, without having to develop a sub-compact on its own;
      8) Chrysler’s sales growth rate has routinely exceeded those of GM and Ford for years now.

      So, did Chrysler benefit from the deal? The real question is what did Fiat get out of it, IMHO…


      • 0 avatar

        Great points. What did Fiat get out of the deal? I think with the $1.3 billion they were given, they were compensated for even going ahead and doing the deal. If it had gone south, they had their pound of flesh, and could just liquidate the Chrysler remains. Fiat really couldn’t lose on the deal.

      • 0 avatar


        Yup, you’re right.

        Fiat got the up-front, flash-in-the-pan benefit in $$ courtesy of Uncle Sam; Chrysler got the long-term growth investment in capabilities and fundamentals. Too bad the European malaise consumed much of Fiat’s financial gift: they have nothing new in the pipeline, and are complaining that VW is too effective. (I did hear that they may “import” Jeep platforms for doing some Jeep versions over there.)


  • avatar

    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.

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