PSA Owners Not Happy With CEO’s Decision To Partner With GM
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According to France’s La Tribune, the owners of PSA Peugeot Citroen are not happy with CEO Philippe Varin. They would even have already shown him the door, if a replacement were handy, that is. According to the French newspaper, which has sources inside the Peugeot family which controls 25.2 percent of the company’s assets and 37.9 of its voting rights, the reasons for the saber rattling are twofold: awful sales and the GM alliance.
Varin, who was appointed in 2009 and initially attained decent results, appears to be the kicking boy for PSA’s slumping sales. The automaker is highly reliant on Southern European markets and lacks the export prowess of neighboring rival VW, whose global nature enables it suppress the effects of the weaker Euro and the slumping European auto market. These two circumstances motivated PSA to look for an alliance, which it found in GM; The General then became the French automaker’s second-largest shareholder with a seven percent stake. But now the Peugeot family is doubtful whether “this merger with a U.S. company whose European operations are chronically lossmaking and that suffer from structural overcapacity” is really a good idea, according to La Tribune.
Varin, meanwhile, was the biggest proponent of the GM alliance and his possible dismissal may breed “”mistrust vis-à-vis GM,” La Tribune writes. For its part, GM is looking for the partnership to lead to increases in its profits.
Year to date, the European auto market is down 7.7 percent. PSA sales? Down 15 percent. PSA’s market share fell more than a percentage point to 12.1 percent and firm’s stock lost nearly 24 percent of its value so far this year. Ironically, PSA shares jumped nearly 6.5 percent upon the possibility of Varin being replaced last week, which is likely the only time that a CEO doesn’t want the stock of the company he or she is heading to climb.
So what does all of this mean for GM, its European operations, and The General’s PSA alliance? We think it’s too early to tell; but no matter how members of the Peugeot family may feel, let’s remember that there is one stipulation holding GM and PSA together: the 7 percent stake held by GM in PSA. Other than that, the rest is an “agreement” — which likely has several terms that allow either party to exit the deal. For our part, we don’t really understand why the world’s largest automaker can’t go alone in becoming profitable in Europe… but unlike the fine ladies and gentleman at GM, we don’t have access to the numbers.
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This doesn’t surprise me at all most people are afraid of the unknown myself included 🙂
gm no something we dont,,,,,remember daewoo…
Daewoo is gone as are the old Daewoo platforms. In fact, there is only Chevrolet, Alpheon, and products from Wuling.
Source: http://www.gm-korea.co.kr/gmkorea/index.do
For what former Daewoo engineers offered and offer GM now, their compact and subcompact talents are indispensible.
Remember Daewoo? No.
You’ll only remember Daewoo Motors if you’re stuck in 2005.
I remember daewoo. They spell it different now CHEVROLET.
Now they need to change the way they spell Holden.
II think this merger will be great…….GM will hopeful accomplish a lot with this partnership….getting access to the dealership is one of the biggest things GM needs right now……also a couple of platforms Citroën has GM could use…..my thoughts were GM use the chassis that underpinned the DS9 concept, for there flagship sedan….it will help Citroën swallow cost on R&D and give GM a couple of large Cadillac cars as well (flagship, large coupe, & 4 door coupe) IMO………also Peugeot has wonderful diesel that GM could spread across its line ups (Cadillac and Chevy)which will be a huge plus in the european market…….plus a vice versa effect with PSA in the American market………just my thought on the merger 🙂
I’m very, very skeptical. GM’s newest models ride on the best architectures in the biz. They don’t need PSA’s stuff that was developed with very limited scope (non-globalization) and under equally limited funding.
As for diesel, GM is making their own.
Exhibit A: http://gmauthority.com/blog/2012/06/vauxhall-opel-announce-53-mpg-2013-astra-gtc-biturbo/
and exhibit B:
http://gmauthority.com/blog/2012/04/gm-targeting-700-mile-range-for-chevy-cruze-eco-d-diesel/
The only thing I can clearly see benefiting both companies is joint purchasing power. But that’s a very limited venture…
If so I think they should buy tesla…….for some reason I feel as thought tesla is going to be big car company with great things in there future, so acquiring it should be good with both companies…
I hope the merger will net us a few of those great Peugeot cars and wagons. I’ve traveled in France and can tell you a Peugeot will get the job done. Migrate over to the Peugeot website and take a look a the cars, or check out autozine.com to get a short showing of the company’s line. I own both Ford & GM. I recently drydocked a 2005 Malibi Maxx Wagon because there aren’t any new ones out there to buy. Apparently the General thinks only Cadillac people want a wagon. How about it GM … maybe a Malibu or Lacrosse wagon? And I’ll always regreat letting a close friend have my last new bought GMC Safari. Something the General dosen’t realize that the Peugeot owners won’t be backed into a corner to the point they will be the next Saab or Saturn. Europeans are differnet people, I like the Europeans and one day might be living in Southern France. They are great people, trusting, friendly, and reliant untill you cross them. The alliance will hold till that happens, then look out.