As unconfirmed reports continue to confirm that French carmaker PSA Group has agreed to purchase General Motors’ Opel division, some interesting details regarding negotiations between the two automakers have come to light.
Specifically, the automakers contended differences regarding $10 billion in Opel pension liabilities and GM’s demand that a PSA-owned Opel not compete with Chevrolet in China and other international markets.
According to unnamed sources speaking with Reuters, the issues surrounding the non-compete agreement were settled when GM agreed to pay “substantially more” into the pensions than the $1 billion to $2 billion it had initially offered. Reuters’ sources declined to give any further details.
It is believed that PSA’s purchase of Opel will officially be announced on Monday, at which point we expect to learn more about the transaction. Opel includes U.K.-only sister brand Vauxhall has been unprofitable for the past 16 years under General Motors. GM and PSA initially confirmed that they were negotiating a deal on February 14.
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Mary Barra show us The MaryMarramobile than when you engage the first gear, you reverse!
When Dan Akerson withdrew, I remind me that he could choose Carlos Tavares: He should have had to do it! Again, GM would be number one and now, would earn 15 or 20 billions dollars per year! Mary Barra is very bad!
It sounds as if GM is making concessions simply to get rid of Opel.
Ironically I have just published a three volume book with a title that is NOW likely to be most inappropriate – “On a Global Mission: The Automobiles of General Motors International”. At 1,570 pages this is the most detailed examination of GM’s global reach ever published.
Clearly Tavares of PSA has a vision for Opel. Likely PSA has large blocks of investors who see far ahead and are willing to sacrifice some short term losses. Sadly GM is catering to more impatient investors and foregoing growth that took root in the 1920s. Sad, very sad.
Very true Louis, “little” GM is now on a downward spiral that only has one ending and it’s not a good one. If they had done something similar 10 years ago they could have saved a lot of money, doing it just as GM Europe has almost reached break even means the actual savings will be minimal and have little effect on GM’s bottom line. Mary Barra is a modern day Roger B Smith!
btw I have now obtained all three volumes but am still working through the first one!
Thanks for becoming a customer and reader. Any thoughts you may have will be most welcome.
I agree with you and it’s “investors” which are like the childs wanting their X-mas’ gifts soon! I bet that, One year ago later, the Gm’s share will be at the same price or down priced! For me, it’s the fault of Harold Wilson: He is concerned by the burnt cash by Opel but he don’t hesitate to distribute the money to shareholders by its famous share’s buyback! And don’t forget the Gm’s employees which have received their bonuses! GM is like the roman empire, it was bright and now, it destroys itself! I don’t want to see the sale of the remains to some chinese companies! It disgusts me of the car and it’s my last comment on the matter!
This deal will please Wall Street as well as those who predict that brands like Opel will be squeezed from above and below over the next decade. It’s suppose that this will free up even more cash for GM’s big bet on China and India.
I still think that this is a bad deal. Unlike Ford and PSA, GM never fully delt with over capacity issues (two additional plants should have been closed).
GM could have copied Hyundai by introducing Opel as a Chevrolet companion brand in markers like China while granting Buick independence. This is just one of the many options that GM had four an Opel turnaround.
No more crappy cars we were promised, watch this space…