General Motors Wants $2 Billion For Opel/Vauxhall: Report
What’s the selling price for a huge automaker’s entire European operations? $2 billion, apparently — one billion in cash and another billion in gained liabilities.
That’s the valuation that General Motors and PSA Group are discussing as the American automaker attempts to unload its Opel and Vauxhall divisions, Bloomberg reports.
Sources close to the discussions claim an agreement could be reached as soon as next Thursday. That’s when PSA releases its 2016 earnings report.
However, there’s no shortage of sticking points that could sink the deal. The sources claim issues like pension liabilities, brand value and savings potential have yet to be hammered out.
Germany was shocked to learn of GM’s plans earlier this week, with politicians joining Opel’s works council and union in expressing concern — bordering on outrage — over the American company’s failure to consult them. The sources claim that GM will need to walk a financial tightrope. On one side, the price has to be low enough for PSA to shake hands, but there also needs to be cost savings that Germany, Britain and the unions can agree on. A tall order.
Neither country wants to see any if the assembly plants close, nor lose any of its workforce. Three Opel plants are located in Germany, while Britain hosts two Vauxhall plants.
While an acquisition of Opel/Vauxhall by PSA would help the companies seize a greater European market share while sharing technology, some products — and the factories in which they’re built — might not have a long lifespan.
“We are prepared to conduct talks with PSA in the case of an acquisition openly and in a constructive manner and to bring those talks to a conclusion as soon as possible,” said Wolfgang Schaefer-Klug, Opel’s top labor representative, said in a statement today.
“Our objective must be to seize the existing opportunities to safeguard employment and sites to create a successful Opel/Vauxhall.”
What the sell-off means for Buick, which relies heavily on Opel for its U.S. lineup, is up for debate. TTAC, of course, has a few ideas.
More by Steph Willems
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@Jeff S. " Outside of Europe" that is the point inside Europe, they mean a lot.. They would sell Opels not PSA products. Europe is NOT on the path to eliminate most ICE vehicles, only restricting them in places like Paris/ London. Eliminating Vauxhall and Opel,would be the equivalent of getting rid of Chevrolet/ GMC in the US and renaming the division " GM". Jeff they are selling brands not just vehicles, that is why Opel and Vauxhall are important as name plates Japanese are the main owners of the plants in Thailand. Ford/ GM have a very small prescence. Yes definitely discount India, it is more 4th world in it's market structure
I can see PSA rebadging some PSA products as Opels and Vauxhalls and vice versa. Just because Japan has main ownership of plants in Thailand doesn't mean that Ford and GM plants are not important to Asia. Correct me but I thought the Global Ranger and Global Colorado that is sold in Australia is made in Thailand. Unless I misunderstood some of the articles I have read Ford and GM are going to discontinue production of vehicles in Australia. It seems that Thailand is the place to make trucks for the Japanese and American corporations if they are selling them in Asia. I would find it hard to believe that Thailand is not important to Ford and GM. The Colorado and Ranger do not sell in the same volume as the Hilux but I would find it hard to believe that they are not important to both GM and Ford. If they are that insignificant then why don't GM and Ford discontinue them. Seems like a waste valuable resources to make these trucks in Thailand if that are not selling and not making a profit. Am I missing something from GM and Ford producing vehicles in Asian outside of the ones they make in China? Do you believe it makes economic sense over the long run to keep the German plants? Unless PSA is allowed to use more automation in the German plants and reduce the workforce it doesn't make a lot of sense in the long run. I believe that Ford, GM, and FCA will spend more money on increasing automation in their US plants as a result of President Trump. More manufacturing plants will remain in the US but more will require less UAW workers.