GM Jumps On Talks To Sell European Unit Opel To Peugeot
- Author: Latoya Cobb Feb 17, 2017,
Feb 17, 2017, 0:08
Economy Minister Brigitte Zypries said it was "unacceptable" that Opel and French firm PSA had not consulted ministers or unions before going ahead with the talks.
The maker of Peugeot, Citroen and DS cars is "exploring a number of strategic initiatives with GM with the aim of increasing its profitability and operating efficiency, including a potential acquisition of Opel", a spokesman said.
The move caught German politics completely unawares, raising concerns for about 38,000 Opel jobs in Germany.
PSA is considering the takeover to boost its scale, get access to Opel's engineering and electric-car technology as well as reap savings from joint purchasing and eventually cost cuts. But German politicians and union leaders were quick to demand assurances that German factories and jobs would be secure.
"My inclination is to see them in the United Kingdom because Brexit makes it a less attractive market".
The local carmaker said previously more than one third of its Australian line-up post-2017 could come from Europe, but the loss of Opel to the GM umbrella could force Holden to change course. Opel last made a full-year profit in 1999 on a pre-tax basis. However, a devaluation of the British pound and cooling sales in the United Kingdom following the Brexit vote is claimed to have resulted in an added $300 million of unexpected currency losses in 2016, leading to an operating loss at Opel of $257 million past year.
"We aren't satisfied with these results and the team is focused on mitigating the effect through further cost efficiencies", Barra said after the earnings update.
Neumann is reported as knowing that GM was serious about selling Opel and had undertaken an alternative plan for Opel in order it safeguard it. Analysts at Macquarie estimated that Opel has an enterprise value of about 2.6 billion euros.
GM and PSA already share production of SUVs and commercial vans, a relic of their last attempt to forge a broader alliance, which was unwound in 2013 with the sale of the USA carmaker's stake in PSA.
It would overtake Renault to become the second largest European carmaker, after Volkswagen.