GM Hands Over European Logistics Operations To PSA Peugeot Citroen Subsidiary

Part of the benefits stemming from GM’s global strategic alliance with PSA Peugeot Citroenoriginally announced on February 29 includes the efficiencies related to the design, development, and manufacturing of vehicles as well as several other cost-saving ramifications surrounding sourcing, distribution, and logistics operations. Today, General Motors announced the beginnings of the latter aspect of the partnership by reaching a long-term exclusive agreement to transfer the majority of GM’s logistics business in Europe to Gefco — a wholly-owned subsidiary of PSA Peugeot Cetroen.

The agreement will affect the majority of Opel/Vauxhall, Chevrolet, and Cadillac logistics activities in Europe (including Russia) as well as auxiliary services such as material and component deliveries to manufacturing plants, delivery of finished vehicles to dealerships and the transport of aftersales spare parts to distribution centers.

“This marks the first step in realizing benefits from the larger Alliance with PSA”, said GM Vice Chairman Steve Girsky. This logistics agreement will bring operational efficiency and costs savings to GM and allow us to fully utilize the proven expertise of Gefco.” The agreement between GM and Gefco goes into effect in 2013.

The GM Authority Take

This is only the beginning of the GM-PSA Peugeot Citroen agreement, but it should provide GM with noticeable cost savings related to the logistics activities seen here. In addition, the move is being characterized by GM as allowing the automaker to “focus its internal resources more on GM’s core automotive business”. And we see nothing wrong with that.