For those that think Opel is in bad shape, PSA Peugeot-Citroen seems to be in worse shape. How bad are things? Reports are indicating that the company may not have enough capital to operate by the end of the year. That being the case, the Peugeot family may give General Motors the wheel in a last-chance effort to save the company.
Reportedly, Peugeot has attempted to seek capital from businesses elsewhere, but a lack of bidders who are both interested and capable have pushed PSA in between a rock and a hard place, and has turned to GM — which owns seven per cent of the current business. The move was made with the support of current PSA Chief Executive Phiippe Varin, according to Reuters.
If that GM does end up running PSA, it’s a given that plants will close and jobs will close. At the same time, General Motors — according to a Reuters source — is ready to inject capital into PSA if the company is given control of the French automaker.
Comments
I have mixed emotions here. GM has plenty on their plate already without someone else’s problems.
There are more companies that will face this in the next 5-10 years. We have not yet seen the last of some old names fail.
This BETTER be a rumour.
There is so, so much GM has to do in Europe to get Opel working properly; nevermind the super tiny footprint of Chevrolet. Adding PSA to the mess would result in lots of model overlap, an excess of factories, and GM having to cut all but only the necessary parts of PSA that can integrate and work with Opel.
Buick=Opel=Peugeot….. to me, 3 years ago, this was unthinkable.
I’ll wait and see if this spills over into next week.
Again same as Scott, mixed emotions. Wondering why GM wants/needs Peugoet and Citroen, yes they have decent diesels but so do GM with BiTurbo & SIDI. The only thing I can think of is they are Europes No2 manufacture in sales. Is GM only car firm with shares in PSA or do others Toyota, Mitsubishi for examples have shares too. GM don’t need PSA Vauxhall & Opel are more prestigious so don’t compete, Chevy dose compete so where would that leave Chevy. Also what range of models is there & Peugoet Citroen range duplicates itself. 107/C1 is a rebadged Toyota, the Ion/C Zero is a rebadged Mitsubishi I EV, & the 3008/DS4 are supposedly Mitsubishi ASX based, they still sell the 207 even though its been replaced, the Bipper/Tepee are van based and also based on the Fiat Punto also van based is Partner/Berlingo & Expert/Dispatch MPV’s the latter also badged as Toyota, leaving just 208/C3/DS3, 308/C4, 508/C5/DS5, 5008 & RCZ many of which are old & in need of replacement. PSA needs to go, their market would be shared between other European company’s. I think I read a few months back PSA loose about 30 billion a day in Euros, this could cripple GM again if GM took over PSA. 🙁
GM doesn’t need this. They are on a roll now. GM, keep your nose to the grindstone. You have a history of not doing acquisitions very well at all. And, Peugeot??
“You have a history of not doing acquisitions very well at all.”
Daewoo eventually became GMKorea (formerly GMDAT), possibly the best acquisition GM ever made. Apart from Saab, what other acquisitions did do poorly with?
I wouldn’t say Hummer was poorly run, or aquired. They were profitable, but the market demand shifted and 2008 happened; GM was wise to close Hummer.
There is no prestige in Peugoet or Citroen. For decades they’ve tried to convince people they can match the Germans without successes 607, XM etc. which makes me wonder if GM’s plan for Europe is to make Peugeot and Citroen GM’s Skoda and Seat rivals with Chevy up against VW and Vauxhall & Opel competing with Audi, then Cadillac for VW’s Porsche division.
Taking control over PSA wouldn’t make any economic sense! What would GM win? All efforts to reoranize GME in the past would be for nothing! PSA burns much more money than Opel ever has! French gouvernmet will never accept a radical restructuring which will cost thousand of jobs! The reorganisation would past at least ten years. I’m sure even without GM or another investor PSA wouldn’t completely die Let them reorganize themselves or with help of a Chinese investor!
http://www.carscoops.com/2013/06/china-baic-looking-to-buy-one-of-three.html
Thought GM was trimming down their brands not adding to them, if GM are aligning all their brands into each other where will this leave PSA who’s only strong market outside of Europe is Iran, they’ve never sold well in America & tbh I doubt if Europes big enough for more GM brands.
Wish I could find a nice 404. They should bring those back.
This is not, as some commentors fail to realize, GM going after PSA, it is PSA in a desperate situation to save the company and willing to “give” the company to anyone they feel can save them. GM just announced, not coincidentally, that they would not invest any more money into PSA. For GM to even consider this it will basically be an offer they can not refuse.
Gm will take on PSA only if it is a great deal and only if allowed to shut down plants.
So I doubt it will happen.
SAAB 2.0
Not sure how it will fit into GM’s range in the long or short term. Has PSA had a breakthrough in hybrid technology, will there be a boom in city/minicar/Kei car/A segment class in the next 18 months, maybe the budget class will see a boom or maybe PSA will be used for producing/developing cars for the third world countries. It maybe none of the above just perhaps an opportunity – ether way GM or not PSA needs to cull many models and concentrate on the core range even if that means a three or four car range, even that may not be enough to survive.
1st remark: the PSA shares rose on the rumor that the Peugeot family might give up the control of PSA. “Shares in Peugeot closed 5.5 percent higher at 6.50 euros after the Reuters story was published, while GM shares closed 1.7 percent higher at $33.10 in New York.” — Reuters
2nd remark: this is the issue: currently the heirs of the company’s founder hold 25.2% of the shares of PSA via two holding companies and 37% of the voting rights. So their influence is decisive; the Peugeot family is the largest shareholder of PSA, followed by GM. Spokespeople of the Peugeot family had always insisted that they would never give up control — although there are reports about clevages within the clan, and one wing being ready to give up the control of the automobile company PSA and invest in other areas. And this is the issue: Reuters quotes “The Peugeot family has now accepted that they’ll lose control, so this is no longer an issue.” According to that report, there had also been talks with the Chinese Dongfeng, which is PSA’s joint-venture partner in China, but which came to no conclusion.
So “taking control” does not mean taking the majorty of the capital, but taking the reins of the company in its hands.
The plants are no bargain as labor in France is a killer right now.
Goodyear tire can not get the workers to work and are doing what they can to get out. Drinking, Drugs and even Sex on the job have been issues in the plants not to mention the labor unions that prevent them from making the plants more productive.
Unless they have some small car that is better than anything GM has coming I just do not see any advantage.
They already have to find a way to fix Opel in Europe as if they do not solve that one they could be next to go or be sold.
China is looking at buying 3 makes in Europe. These companies are un names at this point. I wonder if they may turn to GM to broker the deal and GM can make money on it and share in another company in China and sell more product there and not have to give their own intellectual properly away.
To do business in China you have to share the property with a Chinese automaker as a partner. This is why GM is not pushing the Volt there. In other words they want to legally steal your secrets. By using these two companies GM risks nothing of their own and increases volume with their share.
Also the Chinese do not buy Chinese cars. As of now there are none in the top ten or even fifteen top sellers. Most Chinese buyers want cars with Euro or American Status. These two brands would bring the Euro edge to the market for them if sold to the Chinese. Note Volvo was sold to them and is selling well.
With things like this you have to look at all aspects as anymore there is so much more in play than just building and selling cars. Economics and China have changed the whole way things are being done.
I hope it doesn’t become a Saab story.
What would happen to the two wheeled side of the business? Peugoet make many scooters, the market for small motorcycles is booming somewhat especially in developing countries could GM China make them or maybe even Opel. Would GM be interested in two wheel transport or would this arm of the business be sold.
This may not have anything to do with Europe. Peugeot as three assembly plants in China. Maybe that’s what all the interest is about.
BTW, it’s either “taking the reign” or “taking the reins”. There can be only one reign… but one uses more than one rein to lead a horse.
selections from Websters dictionary:
reign “the dominion, sway, or influence of one resembling or held to resemble a monarch”;
also “the territory or sphere that is reigned over”.
rein “a line (as a leather strap) which is fastened to a bit on each side and through which a rider or driver exerts pressure on the bit for governing or guiding an animal (as a horse)”.
also “the controlling or guiding power: position of command [‘the reins of government … have been handed to men of one party’ – A.N.Holcombe]”