Even though we were expecting it, we still can’t quite believe we’re bringing you this news. The owners of Peugeot, Citroen and DS have agreed to buy the Opel and Vauxhall brands from General Motors.
The €2.2 billion move for brands that are currently losing around £200 million every year means that GM now has no official presence in Europe, and Group PSA becomes Europe’s second-largest automotive manufacturer after the Volkswagen Group.
At this stage it’s uncertain in what guises the Vauxhall and Opel brands will continue, but from early comments made by PSA boss Carlos Tavares, it seems that the two companies will continue unchanged for now. He said:
“We are proud to join forces with Opel/Vauxhall and are deeply committed to continuing to develop this great company and accelerating its turnaround. We respect all that Opel/Vauxhall’s talented people have achieved as well as the company’s fine brands and strong heritage.
“We intend to manage PSA and Opel/Vauxhall capitalizing on their respective brand identities. Having already created together winning products for the European market, we know that Opel/Vauxhall is the right partner. We see this as a natural extension of our relationship and are eager to take it to the next level.
“We are confident that the Opel/Vauxhall turnaround will significantly accelerate with our support, while respecting the commitments made by GM to the Opel/Vauxhall employees.”
Parts-sharing across the brands is a certainty, with PSA listing greater economies of scale in purchasing and manufacture. What we don’t know is whether factories will close or the scale of any potential job losses among the 40,000 GM employees in Europe. Annual ‘synergies’, meaning cost savings, of €1.7 billion are predicted by 2026, most of which will have been delivered by 2020, an Opel press release says.
The Opel and Vauxhall manufacturing operations have cost PSA €1.3 billion, with a further €900 million for 50 per cent of GM’s European financial establishment. Investment bank BNP Paribas has bought the other half.
Interestingly, GM is to retain an engineering centre in Torino, Italy, and holds special warrants to allow it to buy shares back in PSA at a later date. We get the feeling this is a story that will rumble on for a long time.