PSA Board Approves Merger With FCA – Announcement Could Come By Thursday
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After officially announcing it was in talks with Fiat Chrysler Automobiles about a potential merger earlier this week, the Groupe PSA board has approved the tie-up, potentially creating one of the largest automotive/mobility companies in the world.
Exor, the holding company in charge of FCA, met to vote on the tie-up tonight, with an announcement expected to be made later this week, perhaps as early as Thursday.
If approved, the newly created joint venture would be led by Peugeot CEO Carlos Tavares, CNBC reports, while Fiat Chrysler chairman and Agnelli family heir John Elkann would continue in his combined role with the company.
When approached for comment by CNBC, PSA would not elaborate on the ongoing discussions, referring media to a press release issued earlier today that simply said the two companies were engaged in “ongoing discussions aiming at creating one of the world’s leading automotive groups.”
2020 Opel Corsa
Groupe PSA, based in the Paris suburb of Rueil-Malmaison, controls the Citroën, DS, Opel, Peugeot, and Vauxhall brands. General Motors sold Opel and Vauxhall to Groupe PSA for $2.6 billion in 2017, with the French conglomerate promptly turning the two struggling companies into money-making success stories, raking in nearly $1 billion in profit from them in a little more than a year.
Prior to selling Opel and Vauxhall to PSA, GM had reached an agreement to collaborate with the French company and share vehicle platforms, components and modules. This then resulted in the two companies planning to develop a new line of MPVs with PSA, before GM sold all of its Opel/Vauxhall assets to PSA a couple of years ago.
At the time of the sale, then president of GM, Dan Ammann, said it would allow the company to “sharply focus our resources on higher-return opportunities as we expand our technical and business leadership in the future of mobility.” In other words, the sale was part of GM’s ongoing effort to manufacture and sell fewer cars in favor of focusing on the mobility sector.
2018 Opel Insignia GSi
However, PSA quickly turned Opel and Vauxhall into successful ventures, cutting overhead costs by restructuring the companies’ respective leadership ladders and simplifying its product lineups. The French company is now working on phasing out the aging GM platforms from Opel and Vauxhall’s lineups in an effort to help it meet emissions. Going forward, the Opel Corsa and Mokka will ride on PSA’s light CMP architecture, while the Adam, Cascada convertible, Karl and Zafira will all be phased out. The only GM-based cars that will remain by the end of this year will be the Astra, which rides on the GM D2 platform, and the Insignia, which rides on the GM E2 platform.
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Odds were against both alone but are they any better off now?
All FCA has to offer is Jeep and Ram the rest is of little value.
The France have been decades from offering a car of any real value.
The reason GM sold off their Opel and Vauxhall operations had much more to do with an ongoing weak Euro currency versus the U.S. Dollar. Ever since Europe/Germany switched from the very strong German Mark to the much weaker Euro, all European profits for GM and Ford turned into ongoing yearly losses.
Back in the 1990’s, before the Euro, GM and Ford made record earnings from Europe for many years. Once they switched into the new Euro currency, all German based car companies made record earnings from both exports and transplant operations in the USA.
With no end in sight, GM made the right decision.
As I said before (clears throat) French management, Italian engineering and Chrysler quality, what can go wrong?……
Hopefully it’s a deal rather than a merger of PSA need SUVs and some NA access in trade for small car and EV platforms for FCA.
Yet, French management at PSA somehow managed to make Opel profitable, when American management at GM never quite figured out how to pull that off. The PSA CEO actually made himself available to be GM’s CEO years ago when he was the #2 at Renault. Missed opportunity – GM should have snapped him up when they had the chance.
Yea by laying off people and shutting down plants, not to mention cutting R$D down by using old PSA tech, real revolutionary…
It is kind of like a guy gutting a Honda to make it faster.
Good for them. Wish them nothing but great things.