Days ago, French automaker PSA Group officially announced plans to purchase General Motors’ European operations, Opel-Vauxhall, for €2.2 billion ($2.33 billion USD). Rumors of the deal had initially spurred heaps of uncertainty among Opel-Vauxhall plant workers, stimulating union and government officials in Germany, the United Kingdom, and Spain to meet with PSA executives regarding the security of those jobs. Looking back, the concerns may have been premature, since PSA Group’s chief executive’s message to Opel and Vauxhall is simple: “we’re here to help”.
Speaking to reporters on the sidelines of the Geneva International Motor Show, PSA CEO Carlos Tavares expressed his sentiments towards the unit his company is acquiring from GM. Turning things around isn’t new for once-troubled PSA, which received a bailout from the French government and a sizable capital infusion from Chinese investors during the financial crisis several years ago.
“The position we are taking here is: We are here to help. We think we can help because we were in the same position four years ago”, said Tavares. “We were also in a difficult financial position, and we were able to turn around our company.”
Bringing Opel-Vauxhall into the black will be no simple task, as the unit “has been making red ink for 10 years, and burning 1 billion euros of cash every year. I think we need all to realize that there is a problem”, said Tavares.
But overall, it’s not an insurmountable task, especially with the scale economies that can be achieved between PSA, which markets the Citroen, Peugeot, DS Automobiles brands, and Opel-Vauxhall.
“We believe that, with humility but some confidence, we can help Opel and Vauxhall turn around”, Tavares stated, while adding that any jobs cuts in the future would not be part of any planning, but rather from overall changes in the industry. Industry analysts don’t see it that way, with some prognosticating jobs cuts totaling 5,000 positions in the combined automaker within the next decade.