PSA Group Reaches Deal With General Motors to Purchase Opel
As expected, a transfer of General Motors’ subsidiary Adam Opel AG to European automaker PSA looks to be a done deal.
PSA’s board approved the deal on Friday, with an official announcement planned for early next week. Considering the European peripheral has cost GM $15 billion in losses since 2000, GM probably isn’t terribly sad to see Opel go.
With talks progressing all week, the two automakers focused on differences on about $10 billion worth of Opel outstanding pension deficiencies and a GM request that a PSA-owned Opel would not compete with its own Chevrolet-based lineup in China or in other overseas markets.
According to Reuters, those issues were finally resolved when General Motors agreed to inject significantly more capital into the pensions than its initial billion dollar offering.
PSA Group had previously stated it would guarantee employment until the end of 2018 for half of Opel’s 38,000 European workforce, but what happens after may be announced next week. On Friday, Opel managers dismissed employees from a meeting to be reconvened on Monday, saying they were not yet ready to discuss the deal’s finer points.
PSA CEO Carlos Tavares mentioned last week that acquiring Opel offered an “opportunity to create a European car champion,” and the potential for 5 million vehicle sales annually. He plans to do that by redeveloping the brand’s lineup with Peugeot and Citroën-based technology, producing anticipated savings of up to 2 billion Euros.
[Image: Opel]
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How long will it take GM to decline to 4th place?
I don't hate GM but I do see a rough road ahead for GM. I think that GM is not finished with pairing down but eventually there will be nothing left to cut. If GM is going to compete in the luxury market they really need to up their game and offer a dealer experience on the level of Lexus and GM needs to decide whatever brand they choose to be the luxury brand needs to be the only luxury brand. GM has got some good products but they need to stay away from the cheapening of their products. The new GM needs to not become the old GM. GMC is profitable and should continue but it is not a good idea to make Buick versions of Chevrolets.
Time for a Market share death watch.
Because this company is not healthy in the marketplace most of the hard decisions they must make fall under the title of " Damage Control " this sale of the European operations the latest example of this , Not saying that they could have done anything else but they should have done this many times over the past 15 years. When I say unhealthy in the marketplace , I refer to their various product in all market segments that are not 1,2 or 3 in their segment against all other brands . GM needs to make class leading product and if they cant kill product that looses money and put their resources into the products that they can be world class in. I know easier said than done but why continue to build lackluster , crappy cars that just diminish brand image . Toyota, BMW, Mercedes , Apple , John Deere , Caterpillar don't do this . Jack Welch when he Ran General electric would sell off any division or company that could not be one , two or three in its industry . Corporate darwinism . Survival of the fittest