Opel/Vauxhall News: Rumorpile: PSA and GM Reach An Agreement on Opel, Announcement Expected Next Week

[William Maley]

Only a few weeks after first learning about the talks between General Motors and PSA Group on the possible purchase of Opel/Vauxhall, Reuters reports that a deal has been reached.

This afternoon, two sources told the news service the board of PSA Group approved the deal. An announcement about the purchase is expected on Monday. Also, Opel cut short a town hall meeting today at their headquarters in Ruesselsheim, Germany due to management being unable to discuss details about the potential acquisition. A town hall meeting possibly discussing this will take place on Monday morning.

Details about the deal are being kept under wraps, but earlier in the week, sources revealed that the two parties had narrowed the differences on the almost $10 billion in Opel pension liabilities and other issues. 

Source: Reuters

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[David]

Cool, excited to hear the details.

[hyperv6]

It will be interesting to see all the details. 

I expect this to really help GM stock and then we will see GM make an announcement on their future global plans to capitalize on the higher stock prices. 

What we do know GM has been doing well even losing baskets of money at Opel. This proves GM can survive with nothing in Europe. But I see it as a reset as they will re enter the market but just how will they do it is the question. This time it will be important to connect the product and make it relevant. 

The main deal is they will be able to focus on making money not just trying to stop losing money and that should help. 

[regfootball]

I want to know if GM and PSA will share platform and powertrain development or anything else going forward.  Friendly cooperation?

[hyperv6]

45 minutes ago, regfootball said:

I want to know if GM and PSA will share platform and powertrain development or anything else going forward.  Friendly cooperation?

Well PSA has nothing to offer GM they really want or need do they? 

GM really can do anything they want with all their other assets globally. Only sharing the Regal with Buick and China also Holden are the real need till they move to a new gen. 

[ocnblu]

Does this mean I'll be able to buy a Cactus here in the U.S.?

 

[riviera74]

18 hours ago, dfelt said:

Cool, excited to hear the details.

That's exactly right.  Details matter!

[daves87rs]

23 hours ago, regfootball said:

I want to know if GM and PSA will share platform and powertrain development or anything else going forward.  Friendly cooperation?

Yes, you'll see bits and pieces as the look to share costs...

[regfootball]

my guesses here

1. chevy had to pull out of europe before they could logically sell opel and have Opel's worth remain the best

2. they've been courting PSA for a long time, this deal is a precursor to an actual deal of greater cooperation at some point down the road

3. Chevy could return to Europe if they think it makes sense

4. Opel realistically could not grow any more in sales as a brand and in fact forecasts may have predicted decrease over time.

 

[hyperv6]

Reg I agree on many points. 

This was not a sudden deal and it had been in the works for a good while. 

I also see Europe as a very stagnate market. Just look at all the home brands and how they rely on N America and China for Survival of their brands. Growth there is slow to nothing. 

While I see GM returning with Chevy it is not a must be for them and it will take time and careful product planning. Just look at how Honda and Toyota struggle in Europe. 

Also the simple fact is GM can write off the failure to make money at Opel but it does nothing to fix the low stock prices that it helps create. Stocks for Automakers are stagnate even for companies doing well like Ford. GM is as profitable as they have been for years but the news out of Opel has hurt them time and time again with the losses.  Just look at the bounce the price took when the news leaked of the sale. 

Opel has been a gangrene finger on a healthy hand. There is no easy or sure way to cure it so remove the finger to save the hand. Why. Stock prices. GM is at risk as long as stocks remain down. GM is in a good place to weather a tough market in all areas of cost control and profitability but they still have depressed stock  prices. Few automakers have good stock prices and most of the prices defy logic. Ford and GM should be higher and Tesla should had never been that high. There is no accounting to market whims. 

The Automakers are looking to high tech development as a way to drive stocks as that is what Tesla is riding as most people are now playing the game with medical and high tech stocks. My Uncle has made millions doing just this. They are the new area where gains can be made in large amounts in a short time. The Risk also go up substantially too.

As for Opel their total volume they sell is not going to hurt GM. Also their contribution to GM is not going to hurt as GM is more than able to do anything they were doing in Germany at any of their other tech centers. Hell the Regal was also built here too. Only the Convertible made in Poland that sells a small number per month will be an issue here and it was time for it to go anyways as  the model is coming to an end in Europe.

China will buy about anything with Buick on it and GM has established a large design and tech center just for Buick in China to serve their market. Growth there is still on the increase. 

This is like the Pontiac question. You have to weigh the info and not make an emotional derision. This is a thinking issue not one you make with the heart. It is the kind of decision GM avoided for decades on many other issues that lead them to Chapter 11.

The Sloan era is long gone and trying to run that play today will only get you sacked. 

[aurora97]

I think this will give PSA the opportunity to reenter the North American market.  It is reasonable to believe that Opel already has the safety and regulation specs as part of the deal that PSA gets.  There has been a lot of progress to homogenize the European and North American standards.  But this purchase should cut down the time and cost to have PSA be back across the Atlantic in over 25 years.  If Europe does have a stagnant market, then it only makes sense for PSA to go west and stake their claim for survival.  Perhaps the 2019 Peugeot will finds its way to a dealership near you. 

[frogger]

I can not imagine PSA risks trying to export to the US given the current political environment, nor a US centric name like Chevy doing well in Europe for the same reasons.

 

[hyperv6]

PSA would be a greater disaster than the FCA moves.

French product have never done well here and much of what they offer is not competitive with an already full market.

The Opel products would not save them either.

They also will not be any cheaper to draw people to take a chance on them.

[frogger]

Press conference happened early in Europe today. http://www.reuters.com/article/us-opel-m-a-psa-idUSKBN16D0J1

[hyperv6]

I have not see all the details but the announcement gives the basic reasons in a polite way. 

 

GM gets money to buy back stock to increase the value and ward off a possible hostile buy  in. GM loses more long term liabilities that have help depress their stock in spite of good profits else where. 

PSA gets more volume to try to go global with their odd and unknown cars that will struggle much like FCA in an already very competitive market. 

Lets put it this way there is much less risk to GM on this and much more to gain than PSA. 

I would like to see more on the pension cost and such. 

To me this is like selling a high mileage used car to someone while it was still in decent shape but you know it will have some major rust  problems in the future. The bubbles are just forming under the paint of Opel and the legacy/labor cost are about to burst out and sales are not exactly enough to resolve much. 

It is much like Pontiac. While it is emotional to the history of GM it is the right thing to do. Automakers can no longer operate with 43 different brands anymore efficiently. These hard decisions need to be made for the future long term operation. 

Just as humans as we get older we can no longer do things they way we used to. This is something you have to think with your head and not your heart on.