"Joint Purchasing Without Joint Platforms Is Smoking Joints:" GM To Announce Procurement Plans With PSA, Nothing Else
The great October surprise announcement of progress at GM’s Opel front is turning into an October letdown. What will be announced “this month, early next month” will be a joint purchasing agreement between GM and 7 percent partner PSA Peugeot Citroen, GM CEO Dan Akerson told Reuters ahead of the Sao Paulo Auto Show’s media preview. In the industry, the joint purchasing agreement is seen as a non-event.
“Joint purchasing without joint development and joint platforms is smoking joints,” quipped an executive of a competing European carmaker. “Even with joint platforms, it takes a lot of discipline. Engineers like their own parts, I speak from experience.” Loose procurement pacts, such as the one between Daimler and BMW usually lead to nowhere. Even with joint platforms, savings through common parts often are no more than a noble goal. Opel’s interim-chief Thomas Sedran recently complained that parts from GM’s bin often are too expensive, and by sourcing them elsewhere, one can save a lot of money. “We are talking a significant order of magnitude,” Sedran said.
The GM/PSA joint purchasing program is as old as the announcement of GM’s and PSA’s semi-nuptials. The pooling of R&D, vehicle platforms and technologies has not happened. Plans of platform sharing between Opel and PSA were shot down, allegedly because China intervened, some cited other reasons.
Last weekend in Brazil, everybody waited for GM to announce joint Brazilian production with PSA, but that won’t happen either. “So far the entire focus of the alliance has been Europe and I expect that to continue for some time,” GM’s South America chief Jaime Ardila told Reuters, pulling the rug from under optimistic leaks by French and Brazilian union officials which had said that PSA and GM would be planning to build small cars together in Brazil.
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Back in the middle sixties, the US government prevented GM Canada from selling buses to Cuba. Offended Canadian sensibilities concerning our national independence, but the US was embargoing all trade with Cuba to bring Fidel to his knees. The US has always been a big bully in the hemisphere since the declaration of the Monroe Doctrine, and all US companies in Canada were forbidden to trade with Cuba, despite our foreign policy differences. Might is right and all that stuff. The EU, US, and all the bit players (Canada, Australia and NZ) have a big embargo and sanctions against Iran and its batshit crazy government. Only a few months ago, TTAC had an article on Peugeot's CKD business with Iran, and how Peugeot wasn't toeing the line on EU embargoes. http://www.thetruthaboutcars.com/2012/06/media-reports-peugeot-violates-iran-sanctions-uani-investigate-gm/ Today, I listened to a CBC radio show on how the embargoes are really biting on average Iranis. Lack of food, protein deficiency, and on and on. One Irani spoke about how his friends who used to assemble cars, but the factory had closed and times were super tough, etc., etc. Peugeot used to rely on those CKD kits to Iran, and in their present dire circumstances need every Euro they can scrape up. Enter GM, with US money to buy 7% of Peugeot for no sane business reason anyone can dream up. Sure, speculation has been that it was to stop Peugeot trading with Iran, which Peugeot denied, saying that they had stopped several months before GM bought in. Yes, and pigs do fly, Roberta. Mr. Akerson says GM and Peugeot are in full compliance with US law, er, now anyway. The one remaining problem is Renault. Read Matt Glasnier's report right here on TTAC just a week ago. http://www.thetruthaboutcars.com/2012/10/best-selling-cars-around-the-globe-iran-implodes/ Renault is completely unrepentant. They claim that they are a truly global company, so petty things like politics do not bother them at all. While Peugeot claims to have had trouble financing their sales to Iran due to interbank embargoes with Irani banks, Renault says it has no such problem. The implication from Peugeot is that if they could get financing, they would still be at the old game, GM notwithstanding. So Renault happily goes on building and selling in Iran. Big website, too. Meanwhile, the US has attempted to prevent other countries from importing Iranian oil. However, it has given countries time to change suppliers. These are known as waivers, renewable every 180 days. Poor old Japan, suffering energy shortages after the shutdown of their nuclear industry, has tried valiantly to do so. Other countries have given the US the middle finger, particularly China. The US threat is that if countries don't cut Iranian oil imports, they won't have access to the US financial system. http://www.business-standard.com/india/news/us-renews-waiversiran-sanctions-for-japan-eu-nations/186936/on Toyota claims to have ended exports to Japan in 2010, but Nissan-Renault has taken up the slack. All this is by way of saying that Ghosn is due for a slapdown by either Hillary Clinton or Romney soon. However, it seems likely that the stupid statements GM has made about synergies with Peugeot are as carefully thought out as Akerson's statements about booting Ewanick. It's pretty obvious that the US is propping up Peugeot a bit to make up for hundreds of thousands of lost sales to Iran. This Iran sanction business will blow up again soon, as South Korea isn't too interested in cutting oil imports either, along with China. It's a mess. I hope it turns out well for the average man.
Or GM doesn't know what its doing.