PSA Group, comprised of Peugeot, Citroen and DS, is reportedly deep in discussion with General Motors to purchase the U.S. automaker’s Opel brand, according to a new report from Reuters.
The French automaker confirmed the news Tuesday morning stating it 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.” Sources have said the discussions have reached a more “advanced” stage.
General Motors and PSA previously tied up in a strategic alliance to produce Opel and PSA vehicles, as seen in the 2018 Opel Crossland X and upcoming Opel Grandland X. However, GM largely pulled out of the alliance in 2013 by selling off its stake in PSA.
Neither Opel, Peugeot or the French government were available to comment on the potential acquisition of the GM brand.
Opel has struggled to turn a profit for years and most recently felt setbacks following Britain’s vote to exit the European Union, despite launching all-new product and increasing market share.
General Motors would reportedly hold a stake in the combined entity if a deal does, in fact, come to fruition.
Comments
Don’t do it. Opel has become too connected to the rest of the GM portfolio, particularly with the all new Insignia/Commodore/Regal. GM can make Opel profitable by continuing this pattern of aligning vehicles from Opel, Holden, and Buick. They all serve a similar market in their respective regions, and the similar design language works on all the brands. Economies of scale can be achieved across the brands. Furthermore, GM would be put further back in the global sales race behind Volkswagen and Toyota.
Wow. That came out of left field. That raises so many questions outside of Europe.
What will it mean for Buick? Even with Buick’s China success I think Opel is the engineering brains behind most of Buick’s lineup.
What will it mean for Chevrolet? Would GM try to re-enter European market at some point? That would be such a monumental task with no dealer network, but I can’t believe GM would just walk out of European market.
What will it mean for Holden? Most of their lineup was going to be Opel sourced.
Did we all missed a writing on the wall somewhere? Why abandon Opel/Vauxhall and Europe now after putting so much effort to fix it? I don’t believe Britain leaving EU is the reason even though it pushed their efforts back couple years back.
Greg,
I’m as shocked as any commenter here. The only “writing” I can possibly understand is the fact Holden seems to be relying more on Chevrolets and GMCs than Opels, per recent announcements. Equinox, Acadia, Cruze sedan are just a few.
It may be an early pivot to align Holden with Chevrolet, rather than Opel. However, it’s all still too early. The news does ask more questions than provide answers, though.
Cheers,
-Sean
Maaaate! This Insignia Commodore is front wheel drive ugly, it will go the way of the late 1990’s Ford Taurus ovoid which tanked so bad they had to cancel the second model year and still some never sold.
lmao and Ford Mondeo/Fusion looks good mate?
Let me hear again what a great CEO Barra is. Opel and GM go so far back, what kind of business case is this? And if Opel would go where dose this leave Holden and Vauxhall? I don’t pretend to understand the business and do not know the reasoning behind these talks. Hopfully ( MBM)Mary Barra Motors will change its mind on this.
Very true Greg, Opel today is the only wire that connect GM to European Market and will help to company to sell the future Cadillac’s in his Opel dealers.
Also GM had a error taking out the Daewoo/Chevrolet Europe, this has another error more great yet.
Isn’t PSA loosing millions, so how can they afford to do this. Also Peugoet & Citroen sell similar cars & although the Vauxhall & Opel are more upmarket all four brands would be competing in a similar market against each other. Big cars would be non existent because the French cannot make a big car so we’d end up with small cars, SUVs & van based MPV’s (basically no choice). Not a fan of French cars, yet they exist as cheap transport for those that are / or have no interest in cars. GM has a lot to loose in this, please let it be a April fools come early 🙁
Soooo, this would essentially remove GM from Europe. Even with Holden and Vauxhall still there. Then with all the platform and engine sharing, it’s like trying to remove your entire vascular system. Idk though. Seems like the billions GM would spend in new products wouldn’t be justified by the hundred million they might get for the sale.
Gm sell opel and peace. To different car world not coporate easly. Holden and gm coporate
Merger Gm-opel/PSA talks.
People here forum dont know psa history and cars
What is the higher tier PSA brand? Citroen?
To gain a foothold in Europe, Cadillac needs to piggyback on top of another brand. Saab would have been ideal for that in the past.
An idea would be in the U.S., Caddy dealers sell a ‘Mini’ brand, so their small cars avoid criticism. And the highest PSA brand goes upmarket and introduces the best Caddy models.
Any way this goes. I’m guessing the German unions are in for some pain.
I work for a car hire company and drive these cars on a daily basis. PSA puts out complete garbage compared to GM.
Don’t know psa history & cars, peugoet purchased Citroen back in 70’s, back then Citroen being more upmarket brand. Now they’ve pushed Citroen downmarket with Peugeot not moving anywhere (hence now Citroen budget brand, Peugoet middle of the range), any buy out / merger would be bad for GM because Peugoet would want to push Vauxhall/Opel below Peugoet (something it has never been), also quality one of Vauxhall/Opel’s strong points would suffer badly under PSA. It has to be said Vauxhall, Opel & Holden do well producing competitive class leading & class challenging honours cars within their ranges.
“People here forum don’t know PSA history and cars”
What are you talking about? Peugeot hasn’t made a solid built car since the 404 and everything Citroen make has been junk since the original DS in the 1950s.
Stop talking out of your arse and go and annoy another message board
Some sort of a joint venture. GM will still maintain it’s manufacturing status in Europe.
PSA will gain additional access to GM products, but PSA will market both PSA and GM brands in Europe.
Don’t know, but GM now has great design and manufacturing capabilities.
So that means Buick will be German and French based from now on?
One final thought – PSA makes huge losses. How can it afford Opel-Vauxhall. Look no further than the Elysee Palace. The French government will make sure this goes through if only to stick one to we Brits by closing down Ellesmere Port and Luton. And they might also like the idea of doing a little damage in Germany too… PSA cars in Britain are consistently at the bottom of JD Power. And a subjective comment (please indulge me) – they are reviled by serious motorists as the cars that are always but always at the head of slow moving queues of traffic!
English government needs to stop this going through
This hurts me to read, I work with Alamo hire car company in Scotland working with various brands including Vauxhall and Peugeot and Vauxhall is a far more luxurious and reliable brand reason why I’ve owned six Vauxhall cars. If this deal happens I can say I will no longer be a owner of a new Vauxhall vehicle knowing the vehicle would be related to a French rubbish automaker. It’s a nightmare that’s all unfolding.
Yes folks the OLD GM is alive and well in the 21st century!
Barra & co have decided GM shouldn’t be a global company any more
Barra & co have decided GM can develop all the vehicles cars it needs in the US
Barra & co have decided GM can survive on US sales of trucks & SUVs
Barra & co have decided GM will also leave Holden high and dry YET AGAIN
Barra & co have decided GM can afford to say goodbye to all the design & engineering talent in Europe
Barra & co have decided GM can design all the cars it needs for China on its own
Barra & co have come up with a plan – A SHORT TERM & SHORT SIGHTED PLAN
Barra & co are admitting that they do not have the business brains to operate a straight forward European vehicle company and make a profit, something their predecessors managed to do for 70 years.
Barra & co are admitting that PSA are better at running a business than they are
What Barra should say is – “We as a management team realise we are not up to the job of running GM and are handing control over to people that are able to get the job done properly”. AND THEN JUST GO!
Ok before anymore of you bust a blood vessel there is more to this than just product.
You need to look at this economically, Labor wise and politically.
Europe and Germany in particular is a pain in the A$$ to do business in. Opel is hemorrhaging money mostly due to law and labor unions that are running them into the ground. I think many of you forget GM just sold off PSA 3 years ago I believe or their controlling share. So partnerships between them is nothing new or stressful.
Now get back to today. Opel needs to change the labor agreements or they will never make money. They need to broker new deals with German government to get back into the black. As it is now Germany and labor will not cut GM a break in anyway.
Now sell control to a Euro firm in trouble and that puts Germany on the edge as they have to help another Euro country and company. This means tax breaks. Also unions will have to cut new agreements with the new controlling MFG so in this case again another Euro company.
As it is GM will go on just as they did making the cars and engineering the cars and PSA will work new deals and market the cars in Europe and GM will control the rest of the global market for these cars with Buick and Holden.
We will see the same products as we have and same GM engineering but even with out control GM may even show a profit with breaks brokered by PSA.
So lets let this play out a little more as this is much deeper than what most of you are talking about. Also GM is not going to come out and say this is what the plan is because they can’t,
We see it in this country often where a trucking company will close down. Then a new one comes in with a new name and they make all new deals with the city and the unions but yet drive the same trucks with the same drivers. There are other variations of these kinds of deals when companies have no other options with stubborn governments and unions.
It is either this or let Opel fail and start over.
Watch as this I believe will be a very clever plan and in the end will make GM profitable in Europe again.
Trust me the French do not want to engineer cars. They were never good at it and probably will never be.
scott3
I hope, really hope, that you are right. Unfortunately, history tells a different story, you are speculating on a French company, doesn’t matter what it makes, any French company has one over riding priority and that is nationalism. The French have been very clever in protecting their industries from the outside world whilst at the same time buying up companies all over the place and within a short space of time screwing them up. You only have to look at the utility companies they took over in Britain. As I said I really do hope you are right and there will be a happy ending to this but the best thing to happen would be a more constructive co-operation agreement over platforms & manufacturing or the whole thing falls through.
Now i agree this is mostly speculation but also it is how business works.
GM has been back and fourth with french companies before and have used them like Washington used Lafayette.
There is no love for the Germans in France and they will work with GM to get help. Mutual enemies have often brought together strange allies.
Europe is a large social experiment that is failing. Many are looking for ways to cope or get out. Example the Brexit.
Companies have ways to deal with regulations or labor that is working against them. Like often when a new buyer for a company here is purchased it is let go to chapter 11. This is a reset for taxes and for new labor agreements. Same with companies like the trucking example I give.
The problem is business is always in flux and it can be good to bad in a short time and agreements or arrangements are at times too rigid to flex with them leaving a company losing money. This is why it is key for labor and MFG to work together for the benefit of both.
I see this as fixing the overhead cost to Opel that is fixed as of now and PSA getting money to help bring them back from failure. If this all works out GM will buy back their share and they will move on. It is not their first partnership and they have worked well before.
This all may not work either but at this point GM has nothing to lose as they could move the engineering back to America or one of their other sites. As it is they are losing money and there is no daylight at the end of the hall unless there are changed they can not get from the Germans.
On the outside you will not see any difference in the way things are product wise or engineering wise.
The only other option GM had was to let Opel fail. But there would have been no German bail out since GM is not a Euro Union based company.
While Socialism likes to call corporations greedy they are a bit greedy themselves. It takes two to tango and they like dancing alone.
The key to keeping the French in check here is they need GM more than GM needs them. If they pull anything GM can just pull out and leave the mess in their lap. Not what they can afford right now. This should keep them honest. Heck GM may be better off if they did bail in the end. GM could easily start over with no baggage as PSA is holding the bag,
The question then is what did GM have to offer PSA to have them buy into a risky position? It has to be more than just the opportunity to run an abattoir.
The French will want control – and they will not want GM creeping back.
If this does go ahead, GM will get a short term financial hit and lose access to Europe other than by importing cars from China, Korea, Uzbekistan, South American and the USA. Relying totally on an import-only strategy will not work in most European markets (Britain being the only exception where place of origin doesn’t count for much).
The brand value of Opel and Vauxhall will fall away – after all, no-one buys a Peugeot or Citroen other than as a budget buy until they can afford something better. Although checking out the road tests and owner experiences of PSA products suggests that anything is better than Peugeot or Citroen!
GM needs to get a grip and go through the short term pain of upsetting the top floor at Russelheim by reducing its European cost base and enforcing a shift of manufacturing to Britain, Spain and Poland from Germany. The Germans could make the more expensive cars, the Brits the Astra sized cars and a new line of SUVs (entice some of that JLR talent to head down the M1 from Coventry to Luton) and the superminis etc in Spain, with Poland handling the people carriers etc.
We all need to let GM know our views (and those of us living in Britain and Germany (and Poland and Spain) lobby our politicians). This will be disaster for Opel-Vauxhall and very quickly too for GM in the USA.
Old-Gm right!!!, funny. Gm-psa already make these grand-land and cross-land crossovers together. Gm will not leave Europe, they are meager together, gm/opel-psa.
The profitability of Opel/Vauxhall in Europe is hidden in the licence fees which the Opel Group GmbH pays to GM for the products developed in the ITEZ (International Technisches EntwicklungsZentrum) in Rüsselsheim. These licences fees are booked by Opel as costs, not as profits.
There is a third common project. Besides the Crossland and the Grandland (I had nearly written “Grassland”), PSA and Opel are working together on a sucessor to the small commerical vehicles (D-Segment) Citroën Nemo und Peugeot Bipper, which are currently built in a cooperation with FIAT, i.e. today FCA at Tofas in Turkey) together with the Fiat Fiorino.
PSA is suffering on the world market by its direct competitor on the French home market growing with the alliance with Nissan (which took control of the Russian Avtovaz and the Japanese Mitsubishi Motors) on the one hand, and the end of the alliance with FIAT in commercial vehicles.
It is just natural that PSA would look for ways to grow by acquisitions, and has thus approached GM with this in the course of ongoing common talks about the technical cooperations.
But maybe GM counters with a proposal to create an allicance similar to the Renault-Nissan-Alliance or even a merger similar to the merger FIAT with Chrysler to FCA.
And PSA could offer GM to replace FIAT as partner for the C-segment commercial vehicle Opel Combo which Opel/Vauxhall is currently sourcing from FIAT (Fiat Dobló) and Chevrolet from Nissan (N200), and also replacing Renault for the larger commercial vehicles Opel Vivaro (Renault Trafic, Nissan Primastar) and Opel Movano (Renault Master).
“The profitability of Opel/Vauxhall in Europe is hidden in the licence fees which the Opel Group GmbH pays to GM for the products developed in the ITEZ (International Technisches EntwicklungsZentrum) in Rüsselsheim. These licences fees are booked by Opel as costs, not as profits.”
If that is the case, then it suggest that Opel is secretly profitable. Indeed, seemingly so secretly profitable that even Mary Barra doesn’t know the secret!
I think whatever way you look at Opel Group, it’s a complete and utter mess. As a friend remarked to me today, “If Opel Group was the answer, it must have been one heck of a dumb question.” Even if the PSA deal doesn’t proceed – and I for one really hope it doesn’t – Opel Group needs radical surgery. The product and technology is there to make the business profitable, it’s just the strategy to make it happen that’s missing.
Opel Group could easily be turned around within GM. It just requires a management team to run the company as a business and not an institution. If there’s anything shocking in this announcements, it’s only GM has hung on for so long as it has.
So how to fix the mess that is Opel Group?
1. Simplify the business and focus upon core products – not distractions such as Grumpy Cats, naming rights for football stadia and the GT Concept. I mean in the case of the latter, just who was the genius who decided to create a concept car which probably cannot be profitably built?
2. Focus upon quality – which really is a mixed bag. Some cars – e.g. current generation Astra are great, but no so my 3 year old Insignia, which is easily the least reliable car I’ve ever owned. In the space of 50,000 miles has required a new side indicator assembly, new speaker trim, new coolant bottle, new coil pack, multiple resets of the infotainment unit and today I’m told by my Vauxhall dealer the reason the pain is coming off in my hand from the front bumper is due to a lacquer issue. Now the service from my local dealer is first rate – but I’m sure any profit Opel Group made from selling me the car has long since disappeared thanks to warranty costs;
3. Align cost footprint with sales footprint. So almost certainly shutter Eisenach, reduce capacity at Russelheim amd prioritise investment at Ellesmere Port, Gilwice,
And once you’ve done that – GM will have gotten itself an asset and not a liability.
Oopps, that last paragraph should have read:
3. Align cost footprint with sales footprint. So almost certainly shutter Eisenach, reduce capacity at Russelheim amd prioritise investment at Ellesmere Port, Gilwice, Luton and Zaragosa.
And once you’ve done that – GM will have gotten itself an asset and not a liability.
You seem to think that the Astra Station Wagons are only sold on Great Britain, and that the Astra Sedan only in Poland.
And that the Vauxhall Insignia has no demand at all on the island. Equally that the Holden Commodore and Buick Regal Station Wagon neither — all of those are built in Rüsselsheim.
A disproportionately small proportion of Astra Sports Tourers are sold in the UK relative to the 5 door; the bulk of Sports Tourers are sold overseas. Indeed I seem to recall at one point it was suggested (possibly Autocar?) that Opel Group considered swapping Gilwice GTC production with Ellesmere Port Sports Tourer production, due to local market demands, with the Astra Hatch continuing to be produced at both plants.
The UK is of course the biggest single market for the Insignia and in 2015 – I don’t have the 2016 figures – accounted for over 1-in-3 of all Opel / Vauxhall Insignia sales in Europe.
Oopps, that last paragraph should have read:
3. Align cost footprint with sales footprint. So almost certainly shutter Eisenach, reduce capacity at Russelheim and prioritise investment at Ellesmere Port, Gilwice, Luton and Zaragosa.
And once you’ve done that – GM will have gotten itself an asset and not a liability.
Finally, I expect this move by GM for so long.
I am convinced that if he can sell Opel and Vauxhall to PSA Group, GM will have more platforms and technologies to deploy the Cadillac, Buick and Chevrolet.
Chevrolet to use as a generalist brand, Buick and Cadillac as premium brands.
I think GM should enter only Cadillac as a luxury brand for the European market, will remove many customers in BMW, Audi, Mercedes, Lexus, Jaguar.
This only works if GM and PSA go into a Renault-Nissan style alliance with Opel as the link.
PSA has had a amazing turn around. Such a move would elevate GM to global number one while boosting platforms via scale.
There is a clear theme emerging here – that GM’s European ‘problem’ is not poor design or poor marketing. It is quite simply the high cost of making cars in Germany. The answers are clear – retain the European design centre in Germany (with increasing input from Britain where there is a growing body of JLR trained designers who, along with those specialists at the likes of GKN are a powerful resource, could add real value) but reduce the manufacturing in Germany on favour of Britain and Poland. Interesting that the Astra (British and Polish) is scoring much higher on the quality charts than the Insignia (German)…
Do not forget that PSA is 14% owned by the French government so politics will override good business and engineering sense if Mary ‘Wall Street slicker’ Barra gets her way and flogs Opel-Vauxhall to the French. The British end will be closed immediately and the German end run down in favour of France.
For the whole of GM, it needs to get shot as fast as possible of Mary Barra and her ilk. What GM needs is the kind of long-sighted, financially astute by engineering savvy type of leadership that Mercedes, Toyota and BMW have had (albeit with one or two rough patches). If Barra remains, GM will shrink to a US/China operation bereft of global skills and then be taken over by someone or other. As happened to shrunken Chrysler…
Why is it that GM is rumored to sell Opel for only 1 Billion when they paid Fiat 2 Billion to get out of not buying them? Sounds like a bad business deal to me.
The ever shrinking, poorly managed GM.
Opel-PSA has had a amazing turn around. Such a move would elevate GM to global number one while boosting platforms via scale.
Not sure how the success of Opel- PSA will elevate GM to global number one.
PSA would serve as GM’s European division while the reforms of Carlos Taveres would ideally influence The General’s global operations leading to higher margins due to better plant utilization and less mechanical redundancy.
Any GM-PSA would end up as a reverse merger with PSA taking over leadership. If a merger happened PSA, then it like Renault, would stick to its historic markets while riding on its unique low cost platforms reducing scale. Nonetheless it would be a wise deal making GM a brand champ in the world’s two most profitable markets not to mention dominance in Latam.