Carlos Tavares, CEO of the automaker behind Peugeot and Citroen, told The Associated Press in an interview that PSA could actually seek to take GM’s brands Opel and Vauxhall global after the closing of the planned 2.2 billion euro ($2.33 billion) deal – a step the Detroit giant didn’t take.
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– The top executive of France’s PSA Group had a message Tuesday for the two European companies it’s buying from General Motors: “We’re here to help”. That’s comprised mostly of non-cash charges related to previously deferred tax assets and pension-related losses that will become unrealizable. GM has been losing money in Europe since 2000.
“The way I look at this is positioning Opel-Vauxhall to be incredibly successful in the future”, Barra said on Monday when asked by a reporter whether she was relieved. Chief executive Mary Barra said in a statement that the decision to sell Opel/Vauxhall was hard “but we are united in belief that it is the right one”.
“Vauxhall particularly is exposed to this, about 80 per cent of its exports are to the European Union, most of its components are”.
Brexit could lead to trade barriers between the United Kingdom and European Union, disrupting supply chains, pushing up the cost of components and raising the price of cars.
Tavares has since cut about 3,000 French assembly line jobs each year through voluntary departures to trim the wage bill to 11 percent of revenue from the 15 percent he inherited and which is roughly where Opel’s labor costs stand today. The GM Financial’s European business has been valued at €0.9 billion, 0.8 times the pro forma book value, will be jointly acquired by PSA Group and BNP Paribas.
Why is Vauxhall being sold to Peugeot’s owner?
PSA CEO Carlos Tavares has reportedly said he is considering taking Opel to markets outside Europe where customers won’t consider buying a French auto in the hope that a German marque will make a better impression. This is made up of the German-based Opel brand and the UK-based Vauxhall brand. This suggests that the Opel Ampera-e, a rebadged Chevrolet Bolt EV, will be launched in Europe as planned later this year.
PSA’s hope is that by combining with Opel-Vauxhall it will gain more scale in Europe as it fights for market share in a fiercely competitive market.
Regarding the relationship of GM and PSA going forward, Barra revealed that the two companies could collaborate on electric vehicle and fuel cell vehicle technology, sharing the investments GM has made in partnership with Honda.
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Many of GM’s most highly regarded vehicles, almost all new Cadillacs, the Chevrolet Camaro and Corvette, etc., were honed on Germany’s Nurburgring. Tavares has pulled the French automaker back from brink of bankruptcy over the past three years and now will try to use that same turnaround magic to do what GM couldn’t do for almost two decades – make Opel and Vauxhaull profitable.
