Jump to content

GM, PSA reportedly reach agreement to sell Opel


rmc523

Recommended Posts

http://www.reuters.com/article/us-opel-m-a-idUSKBN16A240?il=0

 

 


The board of PSA, which makes Peugeot and Citroen cars, approved the deal on Friday, with an announcement planned for Monday, one of the people said.

...

Sources close to the GM-PSA talks had said on Thursday they were progressing well after the carmakers narrowed differences on about $10 billion in Opel pension liabilities and other issues. GM's European arm recorded a 16th consecutive year of losses in 2016.

 

The talks had also encountered difficulties over GM demands that a PSA-owned Opel be barred from competing against its own Chevrolet lineup in China and other overseas markets, they said.

 

The "non-compete" issues were finally resolved as GM agreed to inject "substantially" more into the pensions than the $1 billion to $2 billion it had initially offered, another person said on Friday.

 

More at the link above.

Link to comment
Share on other sites

This makes no sence for PSA. They want to re enter the American market by 2020, so they probably should have made a deal for FCA and sold all the oter brands to the Chinese and kept Jeep and the dealership network to sell PSA cars.

 

I know FCA is a money loser, but they bought money loser Opel, and still have no way to expand into the American market and on top of that they will probably have to get rid of Vauxhall. They now have five brands in the shrinking European market.

Link to comment
Share on other sites

I am no fan of Government Motors, but this is a very smart move, in my opinion. There is no need for engineering centers (and the associated costs of parallel engineering) all over the world. Ford should learn from this........ BUT, will GM buy FCAU now? That would be a very dumb move and would be the first step toward GM's next bankruptcy. I don't think Barra wants anything to do with that albatross, however.

Link to comment
Share on other sites

I now have doubts that GM will buy FCA considering they have retained most of the 10B dollars in pension obligations belonging to Opel/GM Europe.

 

I have reservations regarding PSA's viability in adding a new anchor around its already precarious situation in Europe. Without having sold off stakes to the French gov't and the Chinese it may have already folded. Does it really need two more brands selling the same vehicles?

Link to comment
Share on other sites

Does Buick's cars matter much anymore? Their #1 seller is the Encore. Only the Regal and the convertible whatever are Opels. Lacrosse is Malibu based, but still not a huge growth segment.

 

And who is buying them? Not the "car guys" who like "seeing them" at auto shows. Who knows how long GM will even bother with those low selling models anyway?

  • Like 2
Link to comment
Share on other sites

Does Buick's cars matter much anymore? Their #1 seller is the Encore. Only the Regal and the convertible whatever are Opels. Lacrosse is Malibu based, but still not a huge growth segment.

 

And who is buying them? Not the "car guys" who like "seeing them" at auto shows. Who knows how long GM will even bother with those low selling models anyway?

Matters to the Chinese and only the Chinese

  • Like 1
Link to comment
Share on other sites

I now have doubts that GM will buy FCA considering they have retained most of the 10B dollars in pension obligations belonging to Opel/GM Europe.

 

I have reservations regarding PSA's viability in adding a new anchor around its already precarious situation in Europe. Without having sold off stakes to the French gov't and the Chinese it may have already folded. Does it really need two more brands selling the same vehicles?

 

If anything, this is bad news for FCA as it probably took two possible merger partners out of the picture. Both GM and PSA will most likely not want anything to do with them.

Link to comment
Share on other sites

 

If anything, this is bad news for FCA as it probably took two possible merger partners out of the picture. Both GM and PSA will most likely not want anything to do with them.

There will be no GM/FCA merger -- This is what Marchionne said, was interesting especially when he compliments VW and slams GM in the same statement. "GM might have thrown the baby out with the bath water"

 

https://www.yahoo.com/finance/video/gm-may-thrown-baby-bath-114900246.html

 

The more I look at this the more I see it as a bad deal for GM and a super easy fix, GM just didn't have the balls to close Opel factories, had they closed 2/3 plants and just killed Vauxhall and made them Opel's it would have changed the dynamics, stopped the massive incentives they use, streamlined marketing and eliminated duplication of services. While politically and short term it would have really pissed off the unions/politicians long term it would have helped them, sometimes you have to fight. GM has taken the easy path the whole time. Remember when Ford announced it was closing and the workers burned cars, and the politicians screamed -- Ford didn't care, did it anyways and came out a much better company.

Edited by jasonj80
Link to comment
Share on other sites

I don't believe that GM sells Opels and Vauxhalls in the same markets. Opels are sold on the continent, while Vauxhalls are sold in the United Kingdom. Vauxhalls are simply Opels with a different grille and badge. There really isn't much duplication in that regard.

 

GM had already closed some plants, if I recall correctly. In retrospect, GM Europe never recovered from the short-sighted effort to lower costs by allowing Jose Ignacio Lopez to rip up supplier contracts and demand immediate cost reductions. He got them - but at the cost of long-term quality.

  • Like 1
Link to comment
Share on other sites

I don't believe that GM sells Opels and Vauxhalls in the same markets. Opels are sold on the continent, while Vauxhalls are sold in the United Kingdom. Vauxhalls are simply Opels with a different grille and badge. There really isn't much duplication in that regard.

 

GM had already closed some plants, if I recall correctly. In retrospect, GM Europe never recovered from the short-sighted effort to lower costs by allowing Jose Ignacio Lopez to rip up supplier contracts and demand immediate cost reductions. He got them - but at the cost of long-term quality.

While different it still costs capital, to maintain a brand there is Engineering/Marketing center in England as well and they employee people to do this.

 

Eliminate 1,000 jobs and you've saved ~100 million dollars. GM has 4 assembly plants all in high cost EU countries. Closing 2 of them would yield ~ 1 Billion dollars in savings plus the costs saving with rightsizing your production to market conditions and not build cars people don't want to just achieve economies of scale so your losses are not so bad.

 

I'd guess that GM had people in Europe that were not willing to change, that they tried over the past 4 years under the new post bankruptcy GM and Detroit finally gave up on them. The Euro managers were always saying a fix is coming, being based in Germany didn't help as German executives think they know more than anyone else and thought that they were safe because GM was out of bankruptcy. It is the same issue that Ford when though with its Euro division. PSA isn't going to take that from Opel, 2 years from now there will be a blood bath of employees being terminated and plants closing and PSA will pick a French plant to keep open over a German one.

Edited by jasonj80
Link to comment
Share on other sites

I think one of the reason Chinese buyers choose Buicks is that they symbolize American-style luxury. If GM were to eliminate Buick from their U.S. portfolio, would Chinese buyers care? I don't know if it would have an immediate impact, but if they became a Chinese-only brand, they may lose some of that cachet in time.

  • Like 1
Link to comment
Share on other sites

I think one of the reason Chinese buyers choose Buicks is that they symbolize American-style luxury. If GM were to eliminate Buick from their U.S. portfolio, would Chinese buyers care? I don't know if it would have an immediate impact, but if they became a Chinese-only brand, they may lose some of that cachet in time.

 

The thing is, the only Chinese Buick from the US is the Enclave. The rest of the lineup there is already Chinese-exclusive. So I don't buy that argument. They like the image American-style luxury has, whether it "comes from" America or not. That's why you see brands like Buick, Cadillac, and Lincoln have better images there than BMW, Mercedes, and Audi.

Link to comment
Share on other sites

I think one of the reason Chinese buyers choose Buicks is that they symbolize American-style luxury. If GM were to eliminate Buick from their U.S. portfolio, would Chinese buyers care? I don't know if it would have an immediate impact, but if they became a Chinese-only brand, they may lose some of that cachet in time.

It is actually because the history Buick has in China, the history there is almost concurrent to the history the brand has in the US. http://insight.amcham-shanghai.org/buicks-road-success-china/

Link to comment
Share on other sites

The thing is, the only Chinese Buick from the US is the Enclave. The rest of the lineup there is already Chinese-exclusive. So I don't buy that argument. They like the image American-style luxury has, whether it "comes from" America or not. That's why you see brands like Buick, Cadillac, and Lincoln have better images there than BMW, Mercedes, and Audi.

but if it becomes that Buick only exists in the Chinese market, it could lose whatever street-cred they have as American luxury. You could be right though, they just like the American style and don't care if it actually exists in the U.S.

Link to comment
Share on other sites

but if it becomes that Buick only exists in the Chinese market, it could lose whatever street-cred they have as American luxury. You could be right though, they just like the American style and don't care if it actually exists in the U.S.

 

This is just a guess, but I'd venture to say the average Chinese Buick customer doesn't know that the lineup in China isn't composed of US models.

Link to comment
Share on other sites

The Buick Enclave is US built, it's the Envision that's Chinese.

 

But, Dan Howes of Detroit News and Pete D. of Autoextremist site have good takes on the sale, essentially "good riddance". Not making money in near 20 years? Dump it. Let the tweedy, pipe smoking, Euo-car elitists [manual diesel wagon fans] whine all they want, but it's not 1969 when Opel GT's were for sale.

Link to comment
Share on other sites

Join the conversation

You can post now and register later. If you have an account, sign in now to post with your account.
Note: Your post will require moderator approval before it will be visible.

Guest
Reply to this topic...

×   Pasted as rich text.   Paste as plain text instead

  Only 75 emoji are allowed.

×   Your link has been automatically embedded.   Display as a link instead

×   Your previous content has been restored.   Clear editor

×   You cannot paste images directly. Upload or insert images from URL.

×
×
  • Create New...