PSA Group Reaches Deal with General Motors to Purchase Opel
As expected, a transfer ofÂ General Motors’ subsidiaryÂ Adam Opel AG to European automaker PSA looks to be a done deal.
PSA’s board approved the deal on Friday, with an official announcement planned forÂ early next week. Considering the EuropeanÂ peripheral has cost GM $15 billion in losses since 2000, GMÂ probably isn’t terribly sad to see OpelÂ go.
With talks progressing all week, the two automakers focused on differences on about $10 billion worth of Opel outstanding pension deficienciesÂ and a GM request that a PSA-owned Opel would notÂ compete with its own Chevrolet-based lineup in China or in other overseas markets.Â
According to Reuters, those issues were finally resolved when General Motors agreed to injectÂ significantlyÂ more capital into the pensions than its initial billion dollar offering.
PSA Group had previously stated it would guarantee employment until the end of 2018 for half of Opelâ€™s 38,000 European workforce, butÂ what happens after mayÂ be announced next week. On Friday, Opel managers dismissed employees from a meeting to be reconvened on Monday, saying they were not yet ready to discuss the deal’s finer points.
PSA CEO Carlos Tavares mentioned last week thatÂ acquiring Opel offered an “opportunity to create a European car champion,” and the potential forÂ 5 million vehicle sales annually. He plans to do that by redeveloping the brand’s lineup withÂ Peugeot and CitroÃ«n-based technology, producing anticipated savings of up to 2 billion Euros.
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March 3, 2017 at 07:21AM
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