PSA Group supervisory board approves Opel and Vauxhall takeover

Tammy Harvey
March 6, 2017

The maker of Peugeot, Citroen and DS cars said on Saturday it would hold an early Monday press conference with GM, at which the transaction is expected to be presented after Reuters reported that a deal had been struck between the two automakers.

France's PSA Group has inked a deal to buy General Motors' Opel division, a new report finds.

A spokesman for GM declined to comment.

Len McCluskey, general secretary of Unite, said thousands of Vauxhall workers at Ellesmere Port and Luton had endured a "nerve-wracking" few weeks.

The two companies finalized the deal after several months of discussions and negotiations, apparently overcoming differences on around $10 billion in pension liabilities at GM's European arm that includes Opel and Vauxhall, and which has been losing money for 16 years straight.

Opel has a new owner.

GM has been struggling to make money in Europe for years and almost sold a majority stake the unit in 2009.

For PSA, the Opel deal caps a stellar two-year recovery under cost-cutting CEO Carlos Tavares, who said on February 23 he would apply the same methods to Opel if the deal went through.

This move to sell both Opel and Vauxhall is just one example of GM's more recent approach of not trying to sell every type of vehicle in each market, but instead focusing on its most popular products in only the most profitable markets.

For PSA, the deal caps a stellar two-year recovery under chief executive Carlos Tavares, who is expected to slash costs at Opel in a bid to generate savings of up to 2bn euros a year.

The problem is that to get the business it is acquiring back to health, Tavares is likely to have to make cuts and given the strength of Germany's labour laws, that unfortunately puts Vauxhall in the crosshairs.

PSA chairman Carlos Tavares last month said that he hopes to create a "European auto champion" with the combination and pledged to work with governments and unions that are anxious about job cuts.

Detroit-based GM has been pressing for a deal barring those legacy Opel models from markets including China, Russia and Latin America, sources have said.

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