General Motors and PSA Group completed the sale of Opel/Vauxhall yesterday, effectively ending the era of GM’s European division.
“It is a historic day. We are proud to join Groupe PSA and are now opening a new chapter in our history after 88 years with General Motors. We will continue our path of making technology `made in Germany´ available to everyone. The combination of our strengths will enable us to turn Opel and Vauxhall into a profitable and self-funded business. We have set ourselves the clear target of returning to profitability by 2020,” said Opel Automobile GmbH CEO Michael Lohscheller.
As part of the sale, PSA Group paid 1.53 billion for the Opel and Vauxhall brands and $1.06 billion for the European arm of GM Financial. GM is still on the hook for existing pension obligations for Opel - estimated to be around $3.54 billion.
The final part of the sale also marks some key changes of Opel and Vauxhall's leadership. Four new people - Christian Müller, Rémi Girardon, Philippe de Rovira, and Michelle Wen - will be joining the company's management.
What happens next? The new management team will begin working on a new plan for the future of the two brands. The ultimate goal is to have Opel and Vauxhall return to profitability by 2020.
Source: Reuters, Opel
Press Release is on Page 2
Birth of a European Champion: Opel and Vauxhall join Groupe PSA
- Opel and Vauxhall to be operated as true iconic German and British brands
- New performance plan to be presented in 100 days: to generate a positive operational free cash flow by 2020 as well as an operating margin of 2% by 2020 and 6% by 2026
- Four new team members to join the leadership team
Rüsselsheim. The sale of Opel Automobile GmbH with its brands Opel and Vauxhall by General Motors to Groupe PSA has been finalized now. “It is a historic day,” said Opel Automobile GmbH CEO Michael Lohscheller. “We are proud to join Groupe PSA and are now opening a new chapter in our history after 88 years with General Motors. We will continue our path of making technology `made in Germany´ available to everyone. The combination of our strengths will enable us to turn Opel and Vauxhall into a profitable and self-funded business. We have set ourselves the clear target of returning to profitability by 2020.”
“We are witnessing the birth of a true European champion today,” emphasized PSA Chairman of the board Carlos Tavares. “We will assist Opel and Vauxhall’s return to profitability and aim to set new industry benchmarks together. We will unleash the power of these iconic brands and the huge potential of its existing talents. Opel will remain German, Vauxhall will remain British. They are the perfect fit to our existing portfolio of French brands Peugeot, Citroën and DS Automobiles.” The market share of the enlarged Groupe PSA is now around 17 percent in Europe, making it the continent’s second largest carmaker with first or second place in main markets.
As already assured when the contract was signed in March, all employee codetermination rights will remain unchanged.
The Opel/Vauxhall management team will work on a plan for the future in the next 100 days. “We are eager to build the plan with PSA’s support and obviously together with our partners from the Works Council and the unions,” said Opel CEO Lohscheller. Synergies within the Groupe PSA, for example in purchasing and development, are set to play a major part. The combined entity will unlock substantial economies of scale and synergies in purchasing, manufacturing and R&D estimated at €1.7 Bn at run rate. The goal is to generate a positive operational free cash flow by 2020 as well as an operating margin of two percent by 2020 and six percent by 2026.
Today’s start of a new era is accompanied by some important leadership changes. “I am happy to announce that four new members will join my management team,” said CEO Lohscheller:
- Christian Müller, previously Vice President Global Propulsion Systems – Europe and with Opel since 1996, will succeed William F. Bertagni as Vice President Engineering. He will integrate engineering and powertrain in one department.
- Rémi Girardon, previously Senior Vice President Group Industrial Strategy at Groupe PSA, will succeed Philip R. Kienle as Vice President Manufacturing.
- Philippe de Rovira, previously Group Controller at Groupe PSA, will become the new CFO of Opel, following Michael Lohscheller.
- Michelle Wen, Group Supply Chain Management Network Director at Vodafone Procurement, will be joining the Opel leadership team effective September 1 replacing Katherine Worthen currently Vice President Purchasing and Supply Chain. All other moves are with immediate effect.
“We thank Katherine Worthen, William F. Bertagni and Philip Kienle for all their contributions to Opel/Vauxhall and wish them all the best for the next chapter of their careers within General Motors,” said Opel CEO Lohscheller. “And we cordially welcome Michelle Wen from Vodafone as well as Remi Girardon and Philippe de Rovira from Groupe PSA. I am looking forward to working with these new team members who will reinforce the potential of our leadership team.”
Going forward, Michael Lohscheller is planning with a much leaner management structure, including the number of direct reports. “We are reducing complexity and increasing speed,” said Lohscheller. “I am looking forward to shaping the next chapter of Opel/Vauxhall with the new management team and leading our company into a successful future. The owners and the employees will not be the only ones to benefit from ever stronger Opel and Vauxhall brands – our customers will do so too.”
PSA and Opel/Vauxhall have been working together since 2012. The cooperation so far includes four vehicles from Opel. The first model, the Opel Crossland X, has been available at dealerships since the end of June. The Opel Grandland X SUV in the next higher segment follows in the fall. The successor of the Opel Combo light commercial vehicle will come onto the market next year and as of 2019 the next generation of the best-selling Opel Corsa will be launched.
Opel/Vauxhall and Groupe PSA will continue to work with General Motors in the future. In addition to development in the area of electric propulsion, Opel plants will continue to produce vehicles for the GM brands Buick and Holden.
In parallel, the acquisition of GM Financial's European operations is under way, subject to validation by the different regulatory authorities’ review and is scheduled for the second half of 2017.