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Opel/Vauxhall News: PSA In Discussions With GM About Possibly Acquiring Opel

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PSA Group is in discussions with General Motors on various strategic initiatives, including the possibility of acquiring Opel/Vauxhall. The news was first broke by Bloomberg and Reuters early this morning as sources revealed the two were in talks about swapping the ownership of Opel. Since then, a spokesman for PSA Group confirmed the talks.

The maker of Peugeot, Citroen and DS cars is "exploring a number of strategic initiatives with GM with the aim of increasing its profitability and operating efficiency, including a potential acquisition of Opel."

The two automakers already share production of SUVs and commercial vans, a key remnant of a possible alliance between the two automakers back in 2013.

Why would GM sell Opel? Why is PSA Group interested in it? 

“I can see why GM may possibly seek to sell its European division, which hasn’t made money in many years. It is less clear why Peugeot would be interested in buying GM’s assets. The purchase would give them capacity in Germany, one of the most expensive countries to produce cars and would lead to excess capacity,” said George Galliers, an analyst with Evercore ISI.

For PSA Group, the purchase of Opel would give them access to Opel's engineering and electric-car tech, along with increasing their scale and cost savings from joint purchasing a source tells Bloomberg. 

Source: Bloomberg, Reuters


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So then were would the Buicks and Holdens come from?

Does that mean all that work would come back to the good ol USA?

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My take on this was shock at first but then a little more info appears to change the dynamic.

#1 you can not look at this as a product deal as it is more economic and labor.

Lets face it no matter how good GM makes the Opel it is a money looser due to labor and plant issues. Opel has been a big drain of money all along.

It is reported that GM would remain a partner but not the principal. I some how wonder with the change in ownership PSA can close plants and renegotiate contracts with the unions GM can not do.

I really do not see GM bailing on the global Buick/Opel/Vauxhall/Holden plans. While they may not own the whole thing they will own part of it and just put burden of dealing with the economics to PSA.  I have seen many companies do similar to clean house.

Also while GM may not have as much profit potential they really will lose less money since they have been years from profit and the outlook is little chance of near term profit.

Product wise I see little change but how business is done will change and as it is now that may not be a bad thing.

GM is like a guy hanging on a hot pipe 50 feet over a tank of sharks. He has a choice to hang on and burn his hand till they are useless to swim. Or he can drop now before his hands are burned useless and try to swim out of the pool before the sharks get him. Neither choice is great but you take the one that has the best odds.

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I have been watching this play out this morning. Buick and Holden would be impacted by this more than anyone else.  What about GM China? I do not know if I am favor of this as GM would have no role in Europe. Killing Pontiac and Oldsmobile solved what problem? 

I would rather there be some sort of joint venture and sharing of resources than a right out buyout of Opel.  GM would be smaller than it is now. There are too many ramifications in this.  Ford is one Ford globally as Volkswagen is too.  

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This seems odd to me.   Opel loses money because GM wants it to lose money.  So much R&D is coming out of Europe, but the other divisions are booking the profits from that R&D.  Swinging Opel from the red to the black is just a change in accounting practice. 

I would think that GM buying up PSA and then merging operations with Opel would make more sense in the grand scheme of things.  

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Drew, why should GM BUY PSA?

The auto market in Europe has too many brands and too much capacity given low and falling sales.  GM has been leaving unprofitable markets ever since Mary Barra has been CEO, which is a good thing.  The European market will be in an auto recession before we are here in the USA.  Even though a lot of R&D is in Europe, that is NOT where the $$$ is.  If and only if auto capacity were cut in half, the auto market would begin to fully recover from the the last eight or nine years.  Opel may have its place, but shuttering planes in Germany is extremely difficult, especially compared to the USA.  Better to let PSA and VW fight over a shrinking market than play (and lose $$) in this space.

As for killing Pontiac and Oldsmobile, the problem was that there were simply too many brands given a US market share of less than 30%.  If it was 1990 or earlier, both could be kept because they added to the bottom line.  I miss Olds but I have accepted that GM survival was more important, especially when GM ended Pontiac and Saab and Saturn and Hummer.  GM could not be what it was 25 years ago because of the Japanese and the Korean automakers period.  Same with MB, BMW and VW. 

CEO Barra understands something we all should be cognizant of: smaller and more profitable (and higher free cash flow) is better.  No need to be huge and lumber towards a possible liquidation. Remember what happened to Chrysler after 1998, and the current fate of FCA points to a long-term end.

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@riviera74 I believe Drew as do I see where you could bring in PSA, get the intellectual property rights and then close and consolidate Opel / PSA to have a strong Engineering division with some profitable auto's that are used across the company.

I agree with you that Europe is ready I think for a consolidation in the auto business. China will be the next place for consolidation as right now way to many auto companies there too.

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I think some of you forget GM used to own PSA. They sold them I believe in 2013.

If such a deal is made GM has made it clear they would still be a partner in this deal. The truth is it is the opposite of what it was where GM was the primary they would change places and own the minority but still a sizeable chunk.

I believe PSA being a true Euro company and also being a new owner will have leverage to do things about plants and labor GM already have their hands tied on.

Too many people will look at this as a product deal and it is everything but.

I expect that if this deal comes in we will see little change in GM product or plans for new models.

Something has to give as they can not continue to lose money. They do not want to lose money in Opel as they have made changed to help but they are limited to what they can do.

The thing today is not so much how big you are but how profitable and efficient you are. Like at a race track you can over drive the track and be slower or you can slow your lap and not over drive putting in a faster lap. It is the old go slow to go faster. It is all about efficiency.

The 1800 pound gorilla in the room is while GM profits are up and things are going pretty well they need better stock performance. In fact many Automakers really need better stock performance. This is part of why there is such a rush to autonomous cars as everyone see it as a way to use technology to drive their stock.

I think we need to really take a look at this with more info as it comes in but in the end while this is earth shaking in the headline I expect we will see little change in the products. Where they are built and who builds them may be the major change.

FCA is way over capacity but they have major trouble closing their euro plants do to rules and unions.

I see the sale as a reset for GM with out going though chapter 11 at Opel.

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I hate to see GM sell off Opel/Vaux, but not making profit since 1999 still has to burn their ass no matter the tax benefits here in the US. GM.. may be gearing up for new negotiations with IG Metall. Also the loss of Opel at this point will have little effect on Buick or Holden simply because the engineering on those products are GM's.. they are not property of Opel. Furthermore I'd put American engineering up against the European any day of the week.. especially now. The only real loss will be that of 1.1 Million cars. This will effectively put them behind Renault/Nissan, or make them #4... but even with that.. GM made $12 Billion last year AFTER a loss of almost $1B in Europe

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28 minutes ago, riviera74 said:

Drew, why should GM BUY PSA?

The auto market in Europe has too many brands and too much capacity given low and falling sales.  GM has been leaving unprofitable markets ever since Mary Barra has been CEO, which is a good thing.  The European market will be in an auto recession before we are here in the USA.  Even though a lot of R&D is in Europe, that is NOT where the $$$ is.  If and only if auto capacity were cut in half, the auto market would begin to fully recover from the the last eight or nine years.  Opel may have its place, but shuttering planes in Germany is extremely difficult, especially compared to the USA.  Better to let PSA and VW fight over a shrinking market than play (and lose $$) in this space.

As for killing Pontiac and Oldsmobile, the problem was that there were simply too many brands given a US market share of less than 30%.  If it was 1990 or earlier, both could be kept because they added to the bottom line.  I miss Olds but I have accepted that GM survival was more important, especially when GM ended Pontiac and Saab and Saturn and Hummer.  GM could not be what it was 25 years ago because of the Japanese and the Korean automakers period.  Same with MB, BMW and VW. 

CEO Barra understands something we all should be cognizant of: smaller and more profitable (and higher free cash flow) is better.  No need to be huge and lumber towards a possible liquidation. Remember what happened to Chrysler after 1998, and the current fate of FCA points to a long-term end.

I'm not saying they should, I'm just saying that it would make more sense that way around than this way around. 

Opel loses money only on paper.  Much of the best R&D for small cars and small engines comes out of GM Europe, and that R&D is spread globally.   If GMNA had to pay Opel a proper "licensing fee" for each 2.0T they sold, or each Encore.... if China had to pay a properly priced licensing fee for each Verano.... then Opel wouldn't be losing money. 

It's a financial shell game. 

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Just now, Drew Dowdell said:

I'm not saying they should, I'm just saying that it would make more sense that way around than this way around. 

Opel loses money only on paper.  Much of the best R&D for small cars and small engines comes out of GM Europe, and that R&D is spread globally.   If GMNA had to pay Opel a proper "licensing fee" for each 2.0T they sold, or each Encore.... if China had to pay a properly priced licensing fee for each Verano.... then Opel wouldn't be losing money. 

It's a financial shell game. 

So. What's the reason for this U think? Bluff for a different end game? Help from German Gov? Give Backs from Unions??? 

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10 minutes ago, Cmicasa the Great said:

So. What's the reason for this U think? Bluff for a different end game? Help from German Gov? Give Backs from Unions??? 

Pressure on the German unions, pressure on the German government.  Trying to impress our own administration.

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56 minutes ago, Drew Dowdell said:

Pressure on the German unions, pressure on the German government.  Trying to impress our own administration.

I agree with all except the "impress Admin." I see no relevant reason why GM would give up its European ops to impress "the Orange" as he himself has global ops as well.. that are subject to the ins and outs of doing business in said countries. 

I look at it as 

1) Pressure Unions

2) Pressure German and UK gov to give more subsidies and back them in pressuring unions

3) possibly just getting rid of headache of Brexit and its impact on EU

4) There is talk of GM possibly doing this to open the door to buying FCA.

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" Adding SUVs and boosting market share were not key topics when talking about Opel a few years ago. Not when Morgan Stanley’s Adam Jonas and his team had classified Opel as the “single biggest threat” to GM’s long-term survival. According to their estimates, Opel and its UK sibling, Vauxhall, already had lost

$16 billion in the previous dozen years and would bleed $1 billion more each year on average into the 2020s. "

http://europe.autonews.com/article/20160131/ANE/160129856/how-opel-ford-will-make-europe-a-reliable-profit-source-after-years

http://www.ien.com/operations/news/20852087/gm-may-have-buyer-for-moneylosing-opel

Last year, Opel was a money loser to the tune of $.257Billion 

Sell the perpetual money pit 

 

 

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44 minutes ago, FordCosworth said:

" Adding SUVs and boosting market share were not key topics when talking about Opel a few years ago. Not when Morgan Stanley’s Adam Jonas and his team had classified Opel as the “single biggest threat” to GM’s long-term survival. According to their estimates, Opel and its UK sibling, Vauxhall, already had lost

$16 billion in the previous dozen years and would bleed $1 billion more each year on average into the 2020s. "

http://europe.autonews.com/article/20160131/ANE/160129856/how-opel-ford-will-make-europe-a-reliable-profit-source-after-years

http://www.ien.com/operations/news/20852087/gm-may-have-buyer-for-moneylosing-opel

Last year, Opel was a money loser to the tune of $.257Billion 

Sell the perpetual money pit 

 

 

Again, it's an accounting shell game.  Opel is a major R&D center for GM and the products resulting from that R&D are sold globally. 

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3 hours ago, Drew Dowdell said:

I'm not saying they should, I'm just saying that it would make more sense that way around than this way around. 

Opel loses money only on paper.  Much of the best R&D for small cars and small engines comes out of GM Europe, and that R&D is spread globally.   If GMNA had to pay Opel a proper "licensing fee" for each 2.0T they sold, or each Encore.... if China had to pay a properly priced licensing fee for each Verano.... then Opel wouldn't be losing money. 

It's a financial shell game. 

Worldwide, Ford does the same thing you state with Ford of Europe. 

And they are not going on 2 straight decades of losses.

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Drew is right as this is an end around to get breaks in Germany from the government and Unions like I stated earlier. 

PSA is a Euro company from France and has special consideration from other countries in European Union. 

Germany is a bastard to do business in anymore and they have rejected GM's attempts for breaks. The Unions are worse than the UAW at their toughest.  Give control to the French and they can deliver like Lafayette did to Washington.

GM is still going to MFG and engineer these cars as the French know better than to do it themselves outside the Diesels.

We see things like this happen in this country in a way. Often trucking companies will close down and sell out to a new buyer. Yet they reopen with the same drivers in the same building and the same trucks. The also get breaks from cities to remain and they get a new cut deal with the unions.

What GM is doing here is not a sure thing to work but they got nothing to lose.

PSA and GM have had a good relation for years when GM owned them. Also they sold their control of part of them before.

I see GM getting what they need better deals and I see PSA getting needed capital with more income and at some point GM will regain their share back. It is a win win for both companies if it works out. As it is both are losing money.

As for Buick and Holden they will go on just as they have under GM control with cars engineered by Opel.

Too often socialistic governments will drive companies into the ground. We saw it in England and now in Germany. They get heavy handed to the point they drive out business or break them as they see them as evil and then everyone suffers. California is doing just this to many companies and that is why they are leaving. That is also why half of California is now in Colorado and Oregon. 

At least most here are getting to this same conclusion but on other web sites they are about to bust a blood vessel and thin Mary is the devil incarnate. They are really out in left field as they thing this is all about product and neglect the government and labor end. 

Lets put it this way GM has little option here as if they let Opel fail Germany will not bail them out. 

This is why companies in America file for bankruptcy. It is not a failure so much in many cases as it is a reset. 

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A major difference in the US corporate environment and Europe's corporate environment is bankruptcy law.  Here you can reset (see GM in 2009 and its use of Section 363); in Europe bankruptcy tends to mean liquidation and a whole LOT of lawsuits since BK is about revenge not just money.

If it is as bad as hyperv6 says it is for the people of Europe to think this way (i.e. excessive socialism AND a ridiculous sense of entitlement from corporate Europe), then much of corporate Europe should move a whole lot of their operations (not just a few factories) to the USA to save a whole lot of bother.  I doubt they will (unless Congress and the current administration end corporate taxation).  If I were running a European multinational, I would certainly consider a move to the USA as a lower-cost, less-regulated place to do any and all business and let the Old World deal with the consequences of no jobs and a very nasty recession to go along with the BK of their socialism and their governments.

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5 hours ago, FordCosworth said:

Worldwide, Ford does the same thing you state with Ford of Europe. 

And they are not going on 2 straight decades of losses.

I see what you mean here. What GM needs to do to me is consilidste brands and actually be more like Ford in the sense that they don't have as many brands already costs around more and more. Why not try and get rid of some of the EU brands and use more Chevy/Buick/GMC OR vise Vera's and use Opel here. Use their own version of OneFord. While tacky, it's effective. 

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13 minutes ago, ccap41 said:

I see what you mean here. What GM needs to do to me is consilidste brands and actually be more like Ford in the sense that they don't have as many brands already costs around more and more. Why not try and get rid of some of the EU brands and use more Chevy/Buick/GMC OR vise Vera's and use Opel here. Use their own version of OneFord. While tacky, it's effective. 

They already tried Chevrolet in Europe, it failed.   Opel/Vauxhall have been the European GM brands for so long that I couldn't see them changing names..

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11 hours ago, Drew Dowdell said:

This seems odd to me.   Opel loses money because GM wants it to lose money.  So much R&D is coming out of Europe, but the other divisions are booking the profits from that R&D.  Swinging Opel from the red to the black is just a change in accounting practice. 

I would think that GM buying up PSA and then merging operations with Opel would make more sense in the grand scheme of things.  

Well, letting play around with Opel while they work in other places to make money might not be a bad idea. If GM continues some of the current successes at the moment, I could see them picking up PSA down the road....

Would make sense if they plan not to worry about Europe and work on other markets instead....

3 hours ago, hyperv6 said:

Drew is right as this is an end around to get breaks in Germany from the government and Unions like I stated earlier. 

PSA is a Euro company from France and has special consideration from other countries in European Union. 

Germany is a bastard to do business in anymore and they have rejected GM's attempts for breaks. The Unions are worse than the UAW at their toughest.  Give control to the French and they can deliver like Lafayette did to Washington.

GM is still going to MFG and engineer these cars as the French know better than to do it themselves outside the Diesels.

We see things like this happen in this country in a way. Often trucking companies will close down and sell out to a new buyer. Yet they reopen with the same drivers in the same building and the same trucks. The also get breaks from cities to remain and they get a new cut deal with the unions.

What GM is doing here is not a sure thing to work but they got nothing to lose.

PSA and GM have had a good relation for years when GM owned them. Also they sold their control of part of them before.

I see GM getting what they need better deals and I see PSA getting needed capital with more income and at some point GM will regain their share back. It is a win win for both companies if it works out. As it is both are losing money.

As for Buick and Holden they will go on just as they have under GM control with cars engineered by Opel.

Too often socialistic governments will drive companies into the ground. We saw it in England and now in Germany. They get heavy handed to the point they drive out business or break them as they see them as evil and then everyone suffers. California is doing just this to many companies and that is why they are leaving. That is also why half of California is now in Colorado and Oregon. 

At least most here are getting to this same conclusion but on other web sites they are about to bust a blood vessel and thin Mary is the devil incarnate. They are really out in left field as they thing this is all about product and neglect the government and labor end. 

Lets put it this way GM has little option here as if they let Opel fail Germany will not bail them out. 

This is why companies in America file for bankruptcy. It is not a failure so much in many cases as it is a reset. 

Yep-my other thought if things go south there.....

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1 hour ago, riviera74 said:

A major difference in the US corporate environment and Europe's corporate environment is bankruptcy law.  Here you can reset (see GM in 2009 and its use of Section 363); in Europe bankruptcy tends to mean liquidation and a whole LOT of lawsuits since BK is about revenge not just money.

If it is as bad as hyperv6 says it is for the people of Europe to think this way (i.e. excessive socialism AND a ridiculous sense of entitlement from corporate Europe), then much of corporate Europe should move a whole lot of their operations (not just a few factories) to the USA to save a whole lot of bother.  I doubt they will (unless Congress and the current administration end corporate taxation).  If I were running a European multinational, I would certainly consider a move to the USA as a lower-cost, less-regulated place to do any and all business and let the Old World deal with the consequences of no jobs and a very nasty recession to go along with the BK of their socialism and their governments.

Taxes here have been too high to move it all here but that is a door that could be opened. 

Spain is going bankrupt and Greece has been in trouble. 

England is tired of bailing others out with no say. France is not setting the world on fire. 

There will be a time the Germans will tire of Merkle. The question is how tapped out will The be as they have really been the only solvent country. With the large run of incoming refugees and a sluggish economy it will not get better soon. If they are forced to bail out any others it will only hurt them more.

I agree the timing is right to poach companies to come here and work with them. The only real problem here is just work ethic. We can not get people to show every day or pass a simple drug test. 

We have a hard time even with good paying positions to get people that do not loose their job from missing too much time or getting nabbed in a very basic drug test. Keeping in mind these are the ones who could pass the background test due to the need to handed sensitive information.

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2 hours ago, Cubical-aka-Moltar said:

They already tried Chevrolet in Europe, it failed.   Opel/Vauxhall have been the European GM brands for so long that I couldn't see them changing names..

Then they need to try harder.. try something that Europe and US both like. It seems to work for everybody else. 

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PSA may try to use this purchase as a means to come back into the North American market.  Also, Europe does not have Chapter 11 BK in the same way that the U.S. does.

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On 2/15/2017 at 10:48 AM, ocnblu said:

 

Back on Topic, This is an interesting thought about PSA and GM. We could see the start of consolidation and hopefully a clean up of the over capacity in Europe.

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      Press Release is on Page 2


      Opel/Vauxhall Go Profitable, Electric and Global with PACE!
      Return to profitability by 2020: 2% automotive recurring operating margin, positive operational free cash flow[1] Lower financial break-even point to 800,000 vehicles Electrification and CO2 leadership: All passenger carlines to be electrified by 2024 Improve efficiency towards benchmark levels for manufacturing and logistics cost as well as for wage cost/revenue-ratio Intention to maintain and modernise all plants and to refrain from forced redundancies R&D centre in Rüsselsheim to become a global competence centre for Groupe PSA Enlarge commercial scope: Leverage Opel brand for overseas export opportunities and foster growth of Opel/Vauxhall LCV business PACE! execution to immediately unleash Opel/Vauxhall performance and pave the way to a sustainable future Rüsselsheim.  Michael Lohscheller, CEO of Opel Automobile GmbH, today announced the strategic plan PACE! to restore financial fundamentals and enhance sustainable competitiveness and growth. All PACE! initiatives will contribute to the goals of generating a positive operational free cash flow as well as a recurring operating margin for the auto division of 2% in a first phase by 2020 and of 6% by 2026. Combining strengths will unleash annual synergies on Groupe PSA level of €1.1 billion by 2020 and €1.7 billion by 2026. All actions will contribute to a lower financial break-even point for Opel/Vauxhall of 800,000 vehicles, creating a profitable business model whatever the headwinds may be.
      Having full access to Groupe PSA technologies, Opel/Vauxhall will become a European CO2 leader. By 2024, all European passenger carlines will be electrified – offering a pure battery electric propulsion or plug-in hybrid version alongside efficient internal combustion engines. By 2020, Opel/Vauxhall will have four electrified carlines on the market, including the Grandland X PHEV and the next generation Corsa as a fully electric vehicle.
      The company will enhance its competitiveness by 2020 e.g. by reducing costs by €700 per car. Efficiency of marketing expenses will be improved by more than 10%. Overall efficiencies will be increased by reducing complexity across all functions with a ratio G&A/revenue moving from 5.6% to 4.7% and an objective to bring the company towards industry benchmark in terms of wage cost/revenue ratio. Optimising R&D and CapEx at 7-8% of automotive revenue, manufacturing and administration processes by 2020 and releasing working capital of €1.2 billion by 2022 will also contribute to seizing synergies.
      Improved competitiveness of the manufacturing plants will lead to new vehicle allocations that will provide a better utilisation rate for the next decade. The two Groupe PSA platforms CMP and EMP2 will be localised in all Opel/Vauxhall plants. To start with, an EMP2-based SUV is planned for Eisenach in 2019; and an EMP2-based D-segment vehicle is coming to Rüsselsheim. The allocation of new powertrains in Opel/Vauxhall manufacturing sites will accompany the shift from GM to Groupe PSA engines and transmissions.
      “PACE! will unleash our full potential. This plan is paramount for the company, to protect our employees against headwinds and turn Opel/Vauxhall into a sustainable, profitable, electrified, and global company. Our future will be secured and we will contribute with German excellence to the Groupe PSA development. The implementation has already started with all teams eager to achieve the objectives,” said Opel CEO Michael Lohscheller.
      The plan is designed with the clear intention to maintain all plants and refrain from forced redundancies in Europe. The necessary and sustainable reduction of labour costs shall be reached with thoughtful measures such as innovative working time concepts, voluntary programs or early retirement schemes.
      All new Opel/Vauxhall vehicles will be engineered in Rüsselsheim, which will be transformed into a global competence centre for the whole Groupe PSA. First areas of expertise are identified, e.g. fuel cells, certain automated driving technologies and driver assistance developments. This will further guarantee German engineering quality and affordable innovations. Altogether, the number of platforms Opel/Vauxhall uses for its passenger cars will be reduced from currently 9 to 2 by 2024. Furthermore, the powertrain families will be optimised from currently 10 to 4. “Aligning architecture and powertrain families will substantially reduce development and production complexity, thus allowing scale effects and synergies, contributing to overall profitability,” said Lohscheller.
      Opel/Vauxhall will switch to efficient and flexible Groupe PSA vehicle architectures faster than originally expected. From 2024 onwards, all Opel/Vauxhall passenger car models will be based on joint Groupe PSA architectures. Next to come are the Combo in 2018 and the next generation of the bestselling Corsa in 2019. This course will be steadily continued with one major launch per year. Counting every body style, Opel/Vauxhall will launch 9 new models by 2020. This line-up will enable to increase the pricing power of Opel/Vauxhall brands and reduce the gap against benchmark by four points.
      Sales growth of the further profiled and strengthened Opel/Vauxhall brands will be supported by initiatives like the start of even more attractive financial offerings as well as full service leasing offers via the Financial Services of Opel and Vauxhall.
      Furthermore, Opel will enter more than 20 new export markets by 2022. Beyond that, Opel will explore global midterm overseas profitable export opportunities.
      To foster growth in the financially attractive light commercial vehicle (LCV) business, Opel/Vauxhall will launch new models and enter new markets with the clear goal to increase its LCV sales by 25% by 2020 against 2017.
      “PACE! has been designed by Opel/Vauxhall for the benefit of our employees as an immediate performance booster,” said Lohscheller.

      View full article
    • By William Maley
      Ever since PSA Group took ownership of Opel and Vauxhall back in spring, many were wondering what the French automaker had in store. Today at a press conference at Opel's headquarters, Opel CEO Michael Lohscheller unveiled the turnaround called PACE.
      Here is a summary of PACE,
      Return Opel and Vauxhall to profit by 2020 Lowering costs on each car built by €700 (about $813) Committed to keeping Vauxhall as a brand for Great Britain Entering 20 new markets by 2022, with Brazil and China topping the list Accelerating the transition from General Motors to PSA Group platforms (originally was planned to finish by 2027, now plan to finish by 2024). This will reduce the number of platforms Opel/Vauxhall use from nine to two. Powertrain families will also decrease from ten to four Nine new models by 2020. This begins with a new Combo van next year and Corsa subcompact in 2019 Launching four electrified models by 2020, with an electrified option being available for each model by 2024 According to Lohscheller, the existing product strategy would not meet the upcoming CO2 targets coming into effect. Thus the decision was made to move up plans for electrification Opel's technical center in Ruesselsheim will engineer all-new Opel/Vauxhall vehicles to have them stand out from their Citroen/DS/Peugeot brethren Ruesselheim will also become a global competence center for PSA, building up expertise in various areas such as autonomous driving and fuel cells Pledging to avoid closing down factories or forced layoffs "The necessary and sustainable reduction of labour costs shall be reached with thoughtful measures such as innovative working time concepts, voluntary programs or early retirement schemes,” the company said in a statement. “PACE! will unleash our full potential. This plan is paramount for the company, to protect our employees against headwinds and turn Opel/Vauxhall into a sustainable, profitable, electrified, and global company. Our future will be secured and we will contribute with German excellence to the Groupe PSA development. The implementation has already started with all teams eager to achieve the objectives,” said Lohscheller in a statement.
      But will it be enough? As Reuters noted, shares in PSA Group dropped 2.2 percent to €19.68 (about $22.65) after Carlos Tavares said Opel's financial health has been getting worse as PACE! was being drawn up.
      “The situation gets worse by the day,” Travares said, without going into detail.
      Source: Autocar, Car, Reuters, Opel
      Press Release is on Page 2


      Opel/Vauxhall Go Profitable, Electric and Global with PACE!
      Return to profitability by 2020: 2% automotive recurring operating margin, positive operational free cash flow[1] Lower financial break-even point to 800,000 vehicles Electrification and CO2 leadership: All passenger carlines to be electrified by 2024 Improve efficiency towards benchmark levels for manufacturing and logistics cost as well as for wage cost/revenue-ratio Intention to maintain and modernise all plants and to refrain from forced redundancies R&D centre in Rüsselsheim to become a global competence centre for Groupe PSA Enlarge commercial scope: Leverage Opel brand for overseas export opportunities and foster growth of Opel/Vauxhall LCV business PACE! execution to immediately unleash Opel/Vauxhall performance and pave the way to a sustainable future Rüsselsheim.  Michael Lohscheller, CEO of Opel Automobile GmbH, today announced the strategic plan PACE! to restore financial fundamentals and enhance sustainable competitiveness and growth. All PACE! initiatives will contribute to the goals of generating a positive operational free cash flow as well as a recurring operating margin for the auto division of 2% in a first phase by 2020 and of 6% by 2026. Combining strengths will unleash annual synergies on Groupe PSA level of €1.1 billion by 2020 and €1.7 billion by 2026. All actions will contribute to a lower financial break-even point for Opel/Vauxhall of 800,000 vehicles, creating a profitable business model whatever the headwinds may be.
      Having full access to Groupe PSA technologies, Opel/Vauxhall will become a European CO2 leader. By 2024, all European passenger carlines will be electrified – offering a pure battery electric propulsion or plug-in hybrid version alongside efficient internal combustion engines. By 2020, Opel/Vauxhall will have four electrified carlines on the market, including the Grandland X PHEV and the next generation Corsa as a fully electric vehicle.
      The company will enhance its competitiveness by 2020 e.g. by reducing costs by €700 per car. Efficiency of marketing expenses will be improved by more than 10%. Overall efficiencies will be increased by reducing complexity across all functions with a ratio G&A/revenue moving from 5.6% to 4.7% and an objective to bring the company towards industry benchmark in terms of wage cost/revenue ratio. Optimising R&D and CapEx at 7-8% of automotive revenue, manufacturing and administration processes by 2020 and releasing working capital of €1.2 billion by 2022 will also contribute to seizing synergies.
      Improved competitiveness of the manufacturing plants will lead to new vehicle allocations that will provide a better utilisation rate for the next decade. The two Groupe PSA platforms CMP and EMP2 will be localised in all Opel/Vauxhall plants. To start with, an EMP2-based SUV is planned for Eisenach in 2019; and an EMP2-based D-segment vehicle is coming to Rüsselsheim. The allocation of new powertrains in Opel/Vauxhall manufacturing sites will accompany the shift from GM to Groupe PSA engines and transmissions.
      “PACE! will unleash our full potential. This plan is paramount for the company, to protect our employees against headwinds and turn Opel/Vauxhall into a sustainable, profitable, electrified, and global company. Our future will be secured and we will contribute with German excellence to the Groupe PSA development. The implementation has already started with all teams eager to achieve the objectives,” said Opel CEO Michael Lohscheller.
      The plan is designed with the clear intention to maintain all plants and refrain from forced redundancies in Europe. The necessary and sustainable reduction of labour costs shall be reached with thoughtful measures such as innovative working time concepts, voluntary programs or early retirement schemes.
      All new Opel/Vauxhall vehicles will be engineered in Rüsselsheim, which will be transformed into a global competence centre for the whole Groupe PSA. First areas of expertise are identified, e.g. fuel cells, certain automated driving technologies and driver assistance developments. This will further guarantee German engineering quality and affordable innovations. Altogether, the number of platforms Opel/Vauxhall uses for its passenger cars will be reduced from currently 9 to 2 by 2024. Furthermore, the powertrain families will be optimised from currently 10 to 4. “Aligning architecture and powertrain families will substantially reduce development and production complexity, thus allowing scale effects and synergies, contributing to overall profitability,” said Lohscheller.
      Opel/Vauxhall will switch to efficient and flexible Groupe PSA vehicle architectures faster than originally expected. From 2024 onwards, all Opel/Vauxhall passenger car models will be based on joint Groupe PSA architectures. Next to come are the Combo in 2018 and the next generation of the bestselling Corsa in 2019. This course will be steadily continued with one major launch per year. Counting every body style, Opel/Vauxhall will launch 9 new models by 2020. This line-up will enable to increase the pricing power of Opel/Vauxhall brands and reduce the gap against benchmark by four points.
      Sales growth of the further profiled and strengthened Opel/Vauxhall brands will be supported by initiatives like the start of even more attractive financial offerings as well as full service leasing offers via the Financial Services of Opel and Vauxhall.
      Furthermore, Opel will enter more than 20 new export markets by 2022. Beyond that, Opel will explore global midterm overseas profitable export opportunities.
      To foster growth in the financially attractive light commercial vehicle (LCV) business, Opel/Vauxhall will launch new models and enter new markets with the clear goal to increase its LCV sales by 25% by 2020 against 2017.
      “PACE! has been designed by Opel/Vauxhall for the benefit of our employees as an immediate performance booster,” said Lohscheller.
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