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  1. Only a month ago, the automotive world was abuzz when a rumor came out that a Chinese automaker had a put in a bid for Fiat Chrysler Automobiles. We also learned about four possible Chinese automakers that were supposedly interested. But after this rumor came out, most of the Chinese automakers stepped back and said they were not interested. The only one that expressed some interest was Great Wall, but only for Jeep. Since then, they have taken a few steps back. It seems no one is interested in FCA, a fact that was confirmed by CEO Sergio Marchionne. According to Reuters, Marchionne said no when asked about if FCA was approached by someone or there was an offer on the table. Lord knows that Marchionne has tried to get someone interested in picking up FCA with such attempts as trying to sell GM's CEO Mary Barra on the idea or Volkswagen. Still, Marchionne isn't giving up. He said the company is working on a plan to “purify” (or streamline) its portfolio. “There are activities within the group that do not belong to a car manufacturer, for example, the components businesses. The group needs to be cleared of those things,” Marchionne said. What will not be leaving FCA's portfolio is Alfa Romeo and Maserati. Last month, a rumor came out that FCA was considering spinning off Alfa Romeo and Maserati into their own separate company. “The way we see it now, it’s almost impossible, if not impossible, to see a spin-off of Alfa Romeo/Maserati, these are two entities that are immature and in a development phase,” said Marchionne. “It’s the wrong moment, we are not in a condition to do it.” That last line might be the understatement of the decade. Source: Reuters View full article
  2. William Maley

    No One Wants To Take FCA Says Marchionne

    Only a month ago, the automotive world was abuzz when a rumor came out that a Chinese automaker had a put in a bid for Fiat Chrysler Automobiles. We also learned about four possible Chinese automakers that were supposedly interested. But after this rumor came out, most of the Chinese automakers stepped back and said they were not interested. The only one that expressed some interest was Great Wall, but only for Jeep. Since then, they have taken a few steps back. It seems no one is interested in FCA, a fact that was confirmed by CEO Sergio Marchionne. According to Reuters, Marchionne said no when asked about if FCA was approached by someone or there was an offer on the table. Lord knows that Marchionne has tried to get someone interested in picking up FCA with such attempts as trying to sell GM's CEO Mary Barra on the idea or Volkswagen. Still, Marchionne isn't giving up. He said the company is working on a plan to “purify” (or streamline) its portfolio. “There are activities within the group that do not belong to a car manufacturer, for example, the components businesses. The group needs to be cleared of those things,” Marchionne said. What will not be leaving FCA's portfolio is Alfa Romeo and Maserati. Last month, a rumor came out that FCA was considering spinning off Alfa Romeo and Maserati into their own separate company. “The way we see it now, it’s almost impossible, if not impossible, to see a spin-off of Alfa Romeo/Maserati, these are two entities that are immature and in a development phase,” said Marchionne. “It’s the wrong moment, we are not in a condition to do it.” That last line might be the understatement of the decade. Source: Reuters
  3. Earlier this week, Chinese automaker Great Wall announced its intentions of possibly buying Jeep. It was hoping to make contact with Fiat Chrysler Automobiles about starting negotiations. But just a day later, Great Wall has poured a bucket of cold water on their plans. In a recent filing to the Shanghai stock exchange, Great Wall said there are “big uncertainties” with FCA and isn't sure if it will continue investigating it. The company also stated they have not made any contact with Fiat's board. "The company has not built any relationship with the directors of FCA nor has the company entered into any discussion or signed any agreements with any officer of FCA so far," Great Wall said in the filing. On this news, Great Wall's share price went into freefall on Tuesday that the Shanghai stock exchange put a halt on trading. Analysts find it hard to see FCA selling Jeep alone, as it is the crown jewel in their lineup. There are also the concerns of getting government approval. A recent report from Deutsche Bank AG said Great Wall could run into issues with getting approval from the Chinese government as restrictions have been placed on capital outflow. There is also the political ramifications in the U.S. due to President Donald Trump. Source: Bloomberg, Reuters
  4. Earlier this week, Chinese automaker Great Wall announced its intentions of possibly buying Jeep. It was hoping to make contact with Fiat Chrysler Automobiles about starting negotiations. But just a day later, Great Wall has poured a bucket of cold water on their plans. In a recent filing to the Shanghai stock exchange, Great Wall said there are “big uncertainties” with FCA and isn't sure if it will continue investigating it. The company also stated they have not made any contact with Fiat's board. "The company has not built any relationship with the directors of FCA nor has the company entered into any discussion or signed any agreements with any officer of FCA so far," Great Wall said in the filing. On this news, Great Wall's share price went into freefall on Tuesday that the Shanghai stock exchange put a halt on trading. Analysts find it hard to see FCA selling Jeep alone, as it is the crown jewel in their lineup. There are also the concerns of getting government approval. A recent report from Deutsche Bank AG said Great Wall could run into issues with getting approval from the Chinese government as restrictions have been placed on capital outflow. There is also the political ramifications in the U.S. due to President Donald Trump. Source: Bloomberg, Reuters View full article
  5. It is no secret that Sergio Marchionne has been looking for a buyer to take on Fiat Chrysler Automobiles for the past two years. But no one seemed seriously interested. That has changed. Automotive News has learned from various sources that a number of Chinese automakers are conducting appraisals into FCA, with some meeting with representatives of U.S. retail groups about a potential acquisition last week. One source revealed that FCA executives have traveled to China to meet with Great Wall Motor Co. and that Chinese delegations were at FCA's HQ. AN also reports that a well-known Chinese automaker has put forth an offer this month for the company, but was turned down as it wasn't enough money to do a sale. It is unclear which Chinese automakers are looking at FCA. Aside from Great Wall, sources say Dongfeng Motor Corp., Zhejiang Geely Holding Group, and Guangzhou Automobile Group (FCA's joint venture partner in China) are interested. Unsurprisingly, FCA and the Chinese automakers are keeping their mouths shut. Why are Chinese automakers suddenly interested in FCA? Part of it comes from the government putting pressure on companies to expand beyond China. A government directive called China Outbound is pushing Chinese companies "to acquire international assets from their industries and operate them "to make their mark." "Right now, Chinese automakers enjoy the full support of the leadership in Beijing to go and make it happen. That's something brand new, and it's really picked up since 2015," said Michael Dunne, president of Dunne Automotive based in Hong Kong. A key example is Geely acquiring Volvo back in 2010. Also, FCA provides Chinese Automakers wanting to enter the U.S. something akin to a turnkey operation. FCA has about 2,600 dealers in the U.S., along with extensive networks in Canada and Mexico. Worldwide, FCA has 162 manufacturing operations and 87 research and development centers - something that would appeal to Chinese Automakers. So if a deal was worked out, what would a Chinese Automaker be getting? According to a source, the sale would include Jeep and Ram Trucks - FCA's profit makers, along with Chrysler, Dodge, and Fiat. Alfa Romeo and Maserati would be spun off to maximize returns for Exor - holding company controlled by Agnelli family which holds a controlling interest in FCA. Source: Automotive News (Subscription Required) View full article
  6. It is no secret that Sergio Marchionne has been looking for a buyer to take on Fiat Chrysler Automobiles for the past two years. But no one seemed seriously interested. That has changed. Automotive News has learned from various sources that a number of Chinese automakers are conducting appraisals into FCA, with some meeting with representatives of U.S. retail groups about a potential acquisition last week. One source revealed that FCA executives have traveled to China to meet with Great Wall Motor Co. and that Chinese delegations were at FCA's HQ. AN also reports that a well-known Chinese automaker has put forth an offer this month for the company, but was turned down as it wasn't enough money to do a sale. It is unclear which Chinese automakers are looking at FCA. Aside from Great Wall, sources say Dongfeng Motor Corp., Zhejiang Geely Holding Group, and Guangzhou Automobile Group (FCA's joint venture partner in China) are interested. Unsurprisingly, FCA and the Chinese automakers are keeping their mouths shut. Why are Chinese automakers suddenly interested in FCA? Part of it comes from the government putting pressure on companies to expand beyond China. A government directive called China Outbound is pushing Chinese companies "to acquire international assets from their industries and operate them "to make their mark." "Right now, Chinese automakers enjoy the full support of the leadership in Beijing to go and make it happen. That's something brand new, and it's really picked up since 2015," said Michael Dunne, president of Dunne Automotive based in Hong Kong. A key example is Geely acquiring Volvo back in 2010. Also, FCA provides Chinese Automakers wanting to enter the U.S. something akin to a turnkey operation. FCA has about 2,600 dealers in the U.S., along with extensive networks in Canada and Mexico. Worldwide, FCA has 162 manufacturing operations and 87 research and development centers - something that would appeal to Chinese Automakers. So if a deal was worked out, what would a Chinese Automaker be getting? According to a source, the sale would include Jeep and Ram Trucks - FCA's profit makers, along with Chrysler, Dodge, and Fiat. Alfa Romeo and Maserati would be spun off to maximize returns for Exor - holding company controlled by Agnelli family which holds a controlling interest in FCA. Source: Automotive News (Subscription Required)
  7. 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. View full article
  8. 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.
  9. If General Motors and PSA Group were hoping to have a smooth sale of Opel, they were dashed this week. Both Automobilwoche and German newspaper Allgemeine Zeitung report Opel's work council and German labor union IG Metall have some specific demands for workers at Opel's development center in Rüsselsheim. The two parties want a guarantee that 7,700 workers will keep their jobs at the center and that continue performing work for GM until 2020 - which could account for 30 percent of the development center's output. There are also some disagreements on vehicle development. PSA Group wants the next-generation Corsa subcompact to use one their platforms, while Opel wants to keep the current platform and also wants to develop an SUV based on the Insignia platform. Until this issue can get resolved, GM and PSA Group cannot move forward with the Opel sale. Originally, GM was planning to move their European assets into a new company titled Opel Automobile GmbH. But plans for this have been postponed. "Only when these service contracts are signed and the new ITEZ contract is signed can the business transition come," an insider told Allgemeine Zeitung. A spokeswoman for the works council told Automobilwoche that there was no disagreement between the various parties on this issue. But the complexity of this matter has pushed back plans for workers to ratify the agreement. Information sessions about the agreement that were supposed to take place this week have been reportedly canceled. Source: Automobilwoche, Allgemeine Zeitung
  10. If General Motors and PSA Group were hoping to have a smooth sale of Opel, they were dashed this week. Both Automobilwoche and German newspaper Allgemeine Zeitung report Opel's work council and German labor union IG Metall have some specific demands for workers at Opel's development center in Rüsselsheim. The two parties want a guarantee that 7,700 workers will keep their jobs at the center and that continue performing work for GM until 2020 - which could account for 30 percent of the development center's output. There are also some disagreements on vehicle development. PSA Group wants the next-generation Corsa subcompact to use one their platforms, while Opel wants to keep the current platform and also wants to develop an SUV based on the Insignia platform. Until this issue can get resolved, GM and PSA Group cannot move forward with the Opel sale. Originally, GM was planning to move their European assets into a new company titled Opel Automobile GmbH. But plans for this have been postponed. "Only when these service contracts are signed and the new ITEZ contract is signed can the business transition come," an insider told Allgemeine Zeitung. A spokeswoman for the works council told Automobilwoche that there was no disagreement between the various parties on this issue. But the complexity of this matter has pushed back plans for workers to ratify the agreement. Information sessions about the agreement that were supposed to take place this week have been reportedly canceled. Source: Automobilwoche, Allgemeine Zeitung View full article
  11. There are still a lot of unanswered questions concerning the sale of Opel/Vauxhall to PSA Groupe. A fair number deals with Buick as a number of their products (including the new Regal) are intertwined with Opel. GM executives say this will not affect Buick's lineup down the road. “The sale of Opel will have no impact on the fresh new lineup Buick is building out,” said Duncan Aldred, GM’s vice president of global Buick and GMC during the launch of the 2018 Regal this week. “This is very much part of our portfolio plan,” said Mark Reuss, GM’s executive vice president of global product development, purchasing, and supply chain to Car and Driver. “As we said, Opel and the engineering/production piece of this is very much intact for all of our global platforms. So, you know, no impact.” While the deal isn't fully finished yet, Reuss claimed that issues relating to products would be settled before the final transfer takes place. Reuss said he didn't know "of a specific agreement" when asked about if GM would pay PSA Group for engineering work done by Opel. In related news, Automotive News Europe reports that Opel would continue to build Buick vehicles beyond 2019 in its German factories. Source: Automotive News Europe (Subscription Required), Car and Driver View full article
  12. There are still a lot of unanswered questions concerning the sale of Opel/Vauxhall to PSA Groupe. A fair number deals with Buick as a number of their products (including the new Regal) are intertwined with Opel. GM executives say this will not affect Buick's lineup down the road. “The sale of Opel will have no impact on the fresh new lineup Buick is building out,” said Duncan Aldred, GM’s vice president of global Buick and GMC during the launch of the 2018 Regal this week. “This is very much part of our portfolio plan,” said Mark Reuss, GM’s executive vice president of global product development, purchasing, and supply chain to Car and Driver. “As we said, Opel and the engineering/production piece of this is very much intact for all of our global platforms. So, you know, no impact.” While the deal isn't fully finished yet, Reuss claimed that issues relating to products would be settled before the final transfer takes place. Reuss said he didn't know "of a specific agreement" when asked about if GM would pay PSA Group for engineering work done by Opel. In related news, Automotive News Europe reports that Opel would continue to build Buick vehicles beyond 2019 in its German factories. Source: Automotive News Europe (Subscription Required), Car and Driver
  13. Last week saw the PSA Group (parent company of Citroen and Peugeot) purchasing Opel and Vauxhall from General Motors for $2.3 billion. This move would make the PSA Group the second-largest automaker in Europe. We already know some of the plans that PSA Group has for their new brands such as setting operating profit targets of 2 percent in 2020 (jumps to 6 percent by 2026) and the next-generation Opel/Vauxhall Corsa being the first new product developed with PSA. But as we alluded to in the original news story, there are a lot of questions that remain unanswered such as possible job cuts or what happens to Buick and Holden as they share products with Opel. I have been doing a bit of thinking on these and some other questions. The end result is this piece. 1: Will there be job cuts and plant closures? In 2016, PSA Group employed 172,000 people worldwide. With the acquisition of Opel and Vauxhall, they will be adding close to 42,000 workers (the majority of those from Opel). The number of plants will also increase to 28 due to this purchase. Sooner or later, PSA Group is going have to make cuts. During the press conference announcing the deal, PSA Group CEO Carlos Tavares said the company “would honor existing labor agreements and closing plants is a “simplistic” solution.” That may be true for now, but this might change within the coming years. Some analysts believe PSA Group will close two to three plants within five years. The most likely place where the closures and layoffs could take place is in Great Britain. The reason as we talked about in a story back in February deals with the decision made by British citizens last year with leaving the European Union. “By leaving, the country would lose access to the EU Single Market which guarantees unconstrained trade across the member states. It would mean various countries would be leveraging tariffs on British-made goods, making production in the country less competitive.” Former British member of parliament and business secretary Sir Vincent Cable outlined how bad this decision looks for Vauxhall in a recent interview on BBC Radio 4. There could be a way that the British Government could at least stall the possible closures. Back in October, the British Government worked out a secret deal with Nissan to keep them investing in British car production at their plant in Sunderland. This deal caused an uproar as the details were kept as many believed the British Government would be handing over money to keep Nissan happy. But sources told British newspaper The Independent back in January that the deal had no mention of money. It could be that the British Government could do something similar for PSA Group to keep jobs, but it is too early to say if this will happen or not. 2: Will this affect PSA’s plans of entering the U.S.? Probably not. Let’s remember that PSA Group is working through a ten-year plan that may or may not see the return of the Citroen and Peugeot, along with the introduction of DS to the country. Already, the first part of this plan is gearing up for the launch of a car sharing service next month. There is also extensive research going on into the U.S. marketplace. But could there be a possibility of Opel or Vauxhall vehicles being sold here? It would not be surprising if there isn’t talk about this at PSA Group’s HQ. But there is a slight complication to this idea. As part of the sale, PSA Group cannot sell any Opel vehicles developed by GM anywhere in various markets outside of Europe (China and U.S. for example) until they transition to PSA platforms. That means a number of models such as the Astra, Insignia, and Mokka are out of the question for the time being. If Opel was chosen to be one of the brands PSA would sell in the U.S., they might not have a full line of vehicles to sell due to this clause. 3: What does the future hold for Buick and Holden? If there are some losers from the sale of Opel, it has to Buick and Holden. Buick has found some success with Opel products as the Encore (rebadged Mokka) has become one the best-selling models for the brand. Holden is getting a shot in the arm as the Astra will hopefully help their fortunes in the compact space, and the new Commodore (rebadged Insignia) has a tough task ahead of it with living up to an iconic name. For the time being, Opel will continue supplying models to both brands. It is what happens in the future that many are concerned about. During the Geneva Motor Show, GM President Dan Ammann said something very interest to Australian journalists about the future of Holden’s products. This makes sense as the Astra was only launched and the Commodore is getting ready to go on sale. But I wouldn’t be surprised if talks begin very soon about this very topic. The same talks are likely to begin at Buick soon where they face the same issue for the Regal and Encore. Our hunch is Buick might have the easier time of two. The Encore would continue on since it shares the same platform as the Chevrolet Trax. As for the Regal, it could leave Buick’s lineup once the next-generation model runs its course. 4: Does GM lose anything with this deal? There has been a lot of talk about how much money will be freed up from the sale of Opel/Vauxhall for GM, along with making a bit more profit. But it comes at a cost that could hurt GM down the road. The recent crop of compact and midsize sedans from GM owe a lot to Opel’s engineering knowledge. Vehicles that excel in driving dynamics and fuel economy are worth their weight in gold when it comes to the European marketplace. As we know, one part of why GM went into bankruptcy was the lack of competitive small and midsize cars that got good fuel economy. Opel would prove to be GM’s savior with this key knowledge. Right now, compacts and midsize sedans aren’t selling as consumers are directing their attention to crossovers and SUVs. This is due in part to lower gas prices. But sooner or later, the price of gas will go back up and cause many to go back to smaller vehicles. With talk about GM scaling back on their small and midsize car lineup, this decision could have consequences down the road. Plus with Opel out of the picture, GM doesn’t have someone it can rely on to get these models back to the forefront. We can hope GM’s North American office has learned some stuff when working with their European counterparts. View full article
  14. Last week saw the PSA Group (parent company of Citroen and Peugeot) purchasing Opel and Vauxhall from General Motors for $2.3 billion. This move would make the PSA Group the second-largest automaker in Europe. We already know some of the plans that PSA Group has for their new brands such as setting operating profit targets of 2 percent in 2020 (jumps to 6 percent by 2026) and the next-generation Opel/Vauxhall Corsa being the first new product developed with PSA. But as we alluded to in the original news story, there are a lot of questions that remain unanswered such as possible job cuts or what happens to Buick and Holden as they share products with Opel. I have been doing a bit of thinking on these and some other questions. The end result is this piece. 1: Will there be job cuts and plant closures? In 2016, PSA Group employed 172,000 people worldwide. With the acquisition of Opel and Vauxhall, they will be adding close to 42,000 workers (the majority of those from Opel). The number of plants will also increase to 28 due to this purchase. Sooner or later, PSA Group is going have to make cuts. During the press conference announcing the deal, PSA Group CEO Carlos Tavares said the company “would honor existing labor agreements and closing plants is a “simplistic” solution.” That may be true for now, but this might change within the coming years. Some analysts believe PSA Group will close two to three plants within five years. The most likely place where the closures and layoffs could take place is in Great Britain. The reason as we talked about in a story back in February deals with the decision made by British citizens last year with leaving the European Union. “By leaving, the country would lose access to the EU Single Market which guarantees unconstrained trade across the member states. It would mean various countries would be leveraging tariffs on British-made goods, making production in the country less competitive.” Former British member of parliament and business secretary Sir Vincent Cable outlined how bad this decision looks for Vauxhall in a recent interview on BBC Radio 4. There could be a way that the British Government could at least stall the possible closures. Back in October, the British Government worked out a secret deal with Nissan to keep them investing in British car production at their plant in Sunderland. This deal caused an uproar as the details were kept as many believed the British Government would be handing over money to keep Nissan happy. But sources told British newspaper The Independent back in January that the deal had no mention of money. It could be that the British Government could do something similar for PSA Group to keep jobs, but it is too early to say if this will happen or not. 2: Will this affect PSA’s plans of entering the U.S.? Probably not. Let’s remember that PSA Group is working through a ten-year plan that may or may not see the return of the Citroen and Peugeot, along with the introduction of DS to the country. Already, the first part of this plan is gearing up for the launch of a car sharing service next month. There is also extensive research going on into the U.S. marketplace. But could there be a possibility of Opel or Vauxhall vehicles being sold here? It would not be surprising if there isn’t talk about this at PSA Group’s HQ. But there is a slight complication to this idea. As part of the sale, PSA Group cannot sell any Opel vehicles developed by GM anywhere in various markets outside of Europe (China and U.S. for example) until they transition to PSA platforms. That means a number of models such as the Astra, Insignia, and Mokka are out of the question for the time being. If Opel was chosen to be one of the brands PSA would sell in the U.S., they might not have a full line of vehicles to sell due to this clause. 3: What does the future hold for Buick and Holden? If there are some losers from the sale of Opel, it has to Buick and Holden. Buick has found some success with Opel products as the Encore (rebadged Mokka) has become one the best-selling models for the brand. Holden is getting a shot in the arm as the Astra will hopefully help their fortunes in the compact space, and the new Commodore (rebadged Insignia) has a tough task ahead of it with living up to an iconic name. For the time being, Opel will continue supplying models to both brands. It is what happens in the future that many are concerned about. During the Geneva Motor Show, GM President Dan Ammann said something very interest to Australian journalists about the future of Holden’s products. This makes sense as the Astra was only launched and the Commodore is getting ready to go on sale. But I wouldn’t be surprised if talks begin very soon about this very topic. The same talks are likely to begin at Buick soon where they face the same issue for the Regal and Encore. Our hunch is Buick might have the easier time of two. The Encore would continue on since it shares the same platform as the Chevrolet Trax. As for the Regal, it could leave Buick’s lineup once the next-generation model runs its course. 4: Does GM lose anything with this deal? There has been a lot of talk about how much money will be freed up from the sale of Opel/Vauxhall for GM, along with making a bit more profit. But it comes at a cost that could hurt GM down the road. The recent crop of compact and midsize sedans from GM owe a lot to Opel’s engineering knowledge. Vehicles that excel in driving dynamics and fuel economy are worth their weight in gold when it comes to the European marketplace. As we know, one part of why GM went into bankruptcy was the lack of competitive small and midsize cars that got good fuel economy. Opel would prove to be GM’s savior with this key knowledge. Right now, compacts and midsize sedans aren’t selling as consumers are directing their attention to crossovers and SUVs. This is due in part to lower gas prices. But sooner or later, the price of gas will go back up and cause many to go back to smaller vehicles. With talk about GM scaling back on their small and midsize car lineup, this decision could have consequences down the road. Plus with Opel out of the picture, GM doesn’t have someone it can rely on to get these models back to the forefront. We can hope GM’s North American office has learned some stuff when working with their European counterparts.
  15. Holden was relying on Opel to help supply its upcoming lineup with models such as the Astra and Insignia rebadged as the Commodore. But with the sale of Opel and Vauxhall to PSA Group, the future of Holden's lineup hangs in the balance. But GM is still committed to the Australian brand and the sale of Opel should not have any impact in the near future according to GM president Dan Ammann. “What I want to emphasise is we are 100 per cent committed to the business in Australia and New Zealand, and we have a lot of exciting things in the pipeline. It’s going to be a really good period of time for the business down there,” said Ammann. "As a lot of you know there are a lot of people in the business at General Motors that have a lot of history and linkage to Holden and there's nothing we want to see more than seeing the business prosper down there. So we're really committed to making the business work down there." For the time being, Holden will be getting the Astra and Commodore from Opel as part of the deal between GM and PSA. Ammann did admit that decisions concerning long-term product plans for Holden are up in the air. "So no specific decisions have been taken on that front. We have, I'd say as a result of yesterday's announcement, more not less opportunities going forward," said Ammann. "Clearly the current models that are just launching will run through their full lifecycle and what we do after that is yet to be determined." Source: CarAdvice , Drive.com.au, Wheels View full article
  16. Holden was relying on Opel to help supply its upcoming lineup with models such as the Astra and Insignia rebadged as the Commodore. But with the sale of Opel and Vauxhall to PSA Group, the future of Holden's lineup hangs in the balance. But GM is still committed to the Australian brand and the sale of Opel should not have any impact in the near future according to GM president Dan Ammann. “What I want to emphasise is we are 100 per cent committed to the business in Australia and New Zealand, and we have a lot of exciting things in the pipeline. It’s going to be a really good period of time for the business down there,” said Ammann. "As a lot of you know there are a lot of people in the business at General Motors that have a lot of history and linkage to Holden and there's nothing we want to see more than seeing the business prosper down there. So we're really committed to making the business work down there." For the time being, Holden will be getting the Astra and Commodore from Opel as part of the deal between GM and PSA. Ammann did admit that decisions concerning long-term product plans for Holden are up in the air. "So no specific decisions have been taken on that front. We have, I'd say as a result of yesterday's announcement, more not less opportunities going forward," said Ammann. "Clearly the current models that are just launching will run through their full lifecycle and what we do after that is yet to be determined." Source: CarAdvice , Drive.com.au, Wheels
  17. It is now official. This morning, PSA Group has agreed to buy Opel and Vauxhall from General Motors for 2.2 billion euros (about $2.3 billion). The deal is comprised of a 1.8 billion euros ($1.9 billion) payment for Opel and Vauxhall, along with a stake in Opel's financing arm. This makes PSA Group the second-largest automaker in Europe. “It gives us the opportunity to become a real European champion. Our plan is to build a common future for Opel and Vauxhall and fix the existing issues,” said PSA Chief Executive Officer Carlos Tavares. Those existing issues include Opel and Vauxhall never breaking even for GM. Over the past two decades, Opel and Vauxhall have lost almost $20 billion. In 2016, the division was projected to break even, but the complications of Great Britain leaving the EU meant they posted a loss of $257 million. "The way I look at this is positioning Opel-Vauxhall to be incredibly successful in the future," said GM CEO Mary Barra when asked by a reporter if she was relieved about the sale of Opel and Vauxhall. "General Motors doesn't have to be relieved. They can be proud of giving Opel-Vauxhall a better future," said Tavares. PSA Group is aiming to make Opel and Vauxhall profitable once again, with operating profit targets of 2 percent in 2020 and 6 percent by 2026. These targets will be reached by joint cost savings of 1.7 billion euros (about $1.8 billion) by spreading the costs of developing new vehicles and sharing purchasing costs. General Motors won't be fully cutting its ties with Opel and Vauxhall for the time being. GM has allowed PSA Group to license technology rights to keep selling current models (including the upcoming Insignia) until they transition onto PSA platforms. According to Reuters, the next-generation Opel/Vauxhall Corsa will be the first PSA developed model. GM will also collaborate with PSA on various projects such as hydrogen fuel cells. Finally, GM will pay PSA 3 billion euros ($3.18 billion) to settle transferred pension obligations. But there are still a number of unanswered questions with this deal. The big one deals with job cuts and plant closures. With this deal, PSA group will add roughly 38,000 workers and 10 production facilities. Some analysts believe that PSA Group will close two to three plants within the next five years, with the possibility of those closures taking place in Great Britain due to Brexit. Taveres has said that the automaker would honor existing labor agreements and closing plants is a “simplistic” solution. “We don’t need to shut down plants,” said Tavares. Second is what will happen for Buick and Holden when models they share with Opel transition to PSA platforms. Both Buick and Holden will be getting the next-generation Insignia as the Regal and Commodore. Buick also gets the Opel Mokka to sell as the Encore, while Holden sells the Astra compact. Finally, there is the question about PSA Group's plans to re-enter the U.S. How does the purchase of Opel and Vauxhall affect their plans? Source: Bloomberg, Reuters, Automotive News (Subscription Required), General Motors, PSA Group Press Release is on Page 2 Opel/Vauxhall to join PSA Group Establishes PSA Group as #2 in Europe. This strong and balanced presence in its home markets will serve as the basis of profitable growth worldwide Joint venture in auto financing with BNP Paribas to support development of Opel/Vauxhall brands €2.2 Bn transaction advances GM’s transformation and unlocks shareholder value through disciplined capital allocation Detroit and Paris – General Motors Co. (NYSE:GM) and PSA Group (Paris:UG) today announced an agreement under which GM’s Opel/Vauxhall subsidiary and GM Financial’s European operations will join the PSA Group in a transaction valuing these activities at €1.3 Bn and €0.9 Bn, respectively. With the addition of Opel/Vauxhall, which generated revenue of €17.7 Bn in 20161, PSA will become the second-largest automotive company in Europe, with a 17% market share2. Creates sound European foundation for PSA to support its worldwide profitable growth “We are proud to join forces with Opel/Vauxhall and are deeply committed to continuing to develop this great company and accelerating its turnaround,” said Carlos Tavares, chairman of the Managing Board of PSA. “We respect all that Opel/Vauxhall’s talented people have achieved as well as the company’s fine brands and strong heritage. We intend to manage PSA and Opel/Vauxhall capitalizing on their respective brand identities. Having already created together winning products for the European market, we know that Opel/Vauxhall is the right partner. We see this as a natural extension of our relationship and are eager to take it to the next level.” “We are confident that the Opel/Vauxhall turnaround will significantly accelerate with our support, while respecting the commitments made by GM to the Opel/Vauxhall employees,” continued Mr. Tavares. Advances GM’s Transformation and Unlocks Value “We are very pleased that together, GM, our valued colleagues at Opel/Vauxhall and PSA have created a new opportunity to enhance the long-term performance of our respective companies by building on the success of our prior alliance”, said Mary T. Barra, GM chairman and chief executive officer. “For GM, this represents another major step in the ongoing work that is driving our improved performance and accelerating our momentum. We are reshaping our company and delivering consistent, record results for our owners through disciplined capital allocation to our higher-return investments in our core automotive business and in new technologies that are enabling us to lead the future of personal mobility. “We believe this new chapter puts Opel and Vauxhall in an even stronger position for the long term and we look forward to our participation in the future success and strong value-creation potential of PSA through our economic interest and continued collaboration on current and exciting new projects,” Ms. Barra concluded. Strengthens Each Company for the Long Term The transaction will allow substantial economies of scale and synergies in purchasing, manufacturing and R&D. Annual synergies of €1.7 Bn are expected by 2026 – of which a significant part is expected to be delivered by 2020, accelerating Opel/Vauxhall’s turnaround. Leveraging the successful partnership with GM, PSA expects Opel/Vauxhall to reach a recurring operating margin3 of 2% by 2020 and 6% by 2026, and to generate a positive operational free cash flow4 by 2020. PSA, together with BNP Paribas, will also acquire all of GM Financial’s European operations through a newly formed 50%/50% joint venture that will retain GM Financial’s current European platform and team. This joint venture will be fully consolidated by BNP Paribas and accounted under the equity method by PSA. The transaction is another step in GM’s ongoing work to transform the company, which has delivered three years of record performance and a strong 2017 outlook, and returned significant capital to shareholders. It will strengthen GM’s core business, support its continued deployment of resources to higher-return opportunities including in advanced technologies driving the future, and unlock significant value for shareholders. By immediately improving EBIT-adjusted, EBIT-adjusted margins and adjusted automotive free cash flow and de-risking the balance sheet, the transaction will enable GM to lower the cash balance requirement under its capital allocation framework by $2 Bn, which it intends to use to accelerate share repurchases, subject to market conditions. GM will also participate in the future success of the combined entity through its ownership of warrants to purchase shares of PSA. GM and PSA also expect to collaborate in the further deployment of electrification technologies and existing supply agreements for Holden and certain Buick models will continue, and PSA may potentially source long-term supply of fuel cell systems from the GM/Honda joint venture. Additional Information Terms of the Agreement Opel/Vauxhall automotive operations will be acquired by PSA for €1.3 Bn. GM Financial’s European operations will be jointly acquired by PSA and BNP Paribas for 0.8 times their pro forma book value at the closing of the transaction, or approximately €0.9 Bn. The transaction has a total value of €2.2 Bn, for Opel/Vauxhall automotive operations and 100% of GM Financial’s European operations. The transaction value for PSA, including Opel/Vauxhall and 50% of GM Financial’s European operations, will be €1.8 Bn. In connection with this transaction, GM or its affiliates will subscribe warrants for €0.65 Bn. These warrants have a nine-year maturity and are exercisable at any time in whole or in part commencing 5 years after the issue date, with a strike price of €1. Based on a reference price of €17.34 for the PSA share5 , the warrants correspond to 39.7 MM shares of PSA, or 4.2% of its fully diluted share capital6. GM will not have governance or voting rights with respect to PSA and has agreed to sell the PSA shares received upon exercise of the warrants within 35 days after exercise. The transaction includes all of Opel/Vauxhall’s automotive operations, comprising Opel and Vauxhall brands, six assembly and five component-manufacturing facilities, one engineering center (Rüsselsheim) and approximately 40,000 employees. GM will retain the engineering center in Torino, Italy. Opel/Vauxhall will also continue to benefit from intellectual property licenses from GM until its vehicles progressively convert to PSA platforms over the coming years. In connection with the transaction, GM will take a primarily non-cash special charge of $4.0-4.5 Bn. Ongoing Pension Fund Commitments All of Opel/Vauxhall’s European and U.K. pension plans, funded and unfunded, with the exception of the German Actives Plan and selected smaller plans will remain with GM. The obligations with respect to the German Actives Plan and these smaller plans of Opel/Vauxhall will be transferred to PSA. GM will pay PSA €3.0 Bn for full settlement of transferred pension obligations. Closing Conditions The transaction is subject to various closing conditions, including regulatory approvals and reorganizations, and is expected to close before the end of 2017. Warrants The issuance of the warrants is subject to the vote of shareholders at PSA’s General Meeting of May 10th, 2017. The three main shareholders of PSA (the French State, the Peugeot family and DongFeng) representing in aggregate 36.6% of the share capital and 51.5%7 of the voting rights of PSA have undertaken to vote in favor of the resolution related to the issuance of the warrants to GM. In the event the warrant issuance reserved to GM and its affiliates is not approved by PSA’s General Meeting, PSA will settle the €0.65 Bn in cash over five years. View full article
  18. It is now official. This morning, PSA Group has agreed to buy Opel and Vauxhall from General Motors for 2.2 billion euros (about $2.3 billion). The deal is comprised of a 1.8 billion euros ($1.9 billion) payment for Opel and Vauxhall, along with a stake in Opel's financing arm. This makes PSA Group the second-largest automaker in Europe. “It gives us the opportunity to become a real European champion. Our plan is to build a common future for Opel and Vauxhall and fix the existing issues,” said PSA Chief Executive Officer Carlos Tavares. Those existing issues include Opel and Vauxhall never breaking even for GM. Over the past two decades, Opel and Vauxhall have lost almost $20 billion. In 2016, the division was projected to break even, but the complications of Great Britain leaving the EU meant they posted a loss of $257 million. "The way I look at this is positioning Opel-Vauxhall to be incredibly successful in the future," said GM CEO Mary Barra when asked by a reporter if she was relieved about the sale of Opel and Vauxhall. "General Motors doesn't have to be relieved. They can be proud of giving Opel-Vauxhall a better future," said Tavares. PSA Group is aiming to make Opel and Vauxhall profitable once again, with operating profit targets of 2 percent in 2020 and 6 percent by 2026. These targets will be reached by joint cost savings of 1.7 billion euros (about $1.8 billion) by spreading the costs of developing new vehicles and sharing purchasing costs. General Motors won't be fully cutting its ties with Opel and Vauxhall for the time being. GM has allowed PSA Group to license technology rights to keep selling current models (including the upcoming Insignia) until they transition onto PSA platforms. According to Reuters, the next-generation Opel/Vauxhall Corsa will be the first PSA developed model. GM will also collaborate with PSA on various projects such as hydrogen fuel cells. Finally, GM will pay PSA 3 billion euros ($3.18 billion) to settle transferred pension obligations. But there are still a number of unanswered questions with this deal. The big one deals with job cuts and plant closures. With this deal, PSA group will add roughly 38,000 workers and 10 production facilities. Some analysts believe that PSA Group will close two to three plants within the next five years, with the possibility of those closures taking place in Great Britain due to Brexit. Taveres has said that the automaker would honor existing labor agreements and closing plants is a “simplistic” solution. “We don’t need to shut down plants,” said Tavares. Second is what will happen for Buick and Holden when models they share with Opel transition to PSA platforms. Both Buick and Holden will be getting the next-generation Insignia as the Regal and Commodore. Buick also gets the Opel Mokka to sell as the Encore, while Holden sells the Astra compact. Finally, there is the question about PSA Group's plans to re-enter the U.S. How does the purchase of Opel and Vauxhall affect their plans? Source: Bloomberg, Reuters, Automotive News (Subscription Required), General Motors, PSA Group Press Release is on Page 2 Opel/Vauxhall to join PSA Group Establishes PSA Group as #2 in Europe. This strong and balanced presence in its home markets will serve as the basis of profitable growth worldwide Joint venture in auto financing with BNP Paribas to support development of Opel/Vauxhall brands €2.2 Bn transaction advances GM’s transformation and unlocks shareholder value through disciplined capital allocation Detroit and Paris – General Motors Co. (NYSE:GM) and PSA Group (Paris:UG) today announced an agreement under which GM’s Opel/Vauxhall subsidiary and GM Financial’s European operations will join the PSA Group in a transaction valuing these activities at €1.3 Bn and €0.9 Bn, respectively. With the addition of Opel/Vauxhall, which generated revenue of €17.7 Bn in 20161, PSA will become the second-largest automotive company in Europe, with a 17% market share2. Creates sound European foundation for PSA to support its worldwide profitable growth “We are proud to join forces with Opel/Vauxhall and are deeply committed to continuing to develop this great company and accelerating its turnaround,” said Carlos Tavares, chairman of the Managing Board of PSA. “We respect all that Opel/Vauxhall’s talented people have achieved as well as the company’s fine brands and strong heritage. We intend to manage PSA and Opel/Vauxhall capitalizing on their respective brand identities. Having already created together winning products for the European market, we know that Opel/Vauxhall is the right partner. We see this as a natural extension of our relationship and are eager to take it to the next level.” “We are confident that the Opel/Vauxhall turnaround will significantly accelerate with our support, while respecting the commitments made by GM to the Opel/Vauxhall employees,” continued Mr. Tavares. Advances GM’s Transformation and Unlocks Value “We are very pleased that together, GM, our valued colleagues at Opel/Vauxhall and PSA have created a new opportunity to enhance the long-term performance of our respective companies by building on the success of our prior alliance”, said Mary T. Barra, GM chairman and chief executive officer. “For GM, this represents another major step in the ongoing work that is driving our improved performance and accelerating our momentum. We are reshaping our company and delivering consistent, record results for our owners through disciplined capital allocation to our higher-return investments in our core automotive business and in new technologies that are enabling us to lead the future of personal mobility. “We believe this new chapter puts Opel and Vauxhall in an even stronger position for the long term and we look forward to our participation in the future success and strong value-creation potential of PSA through our economic interest and continued collaboration on current and exciting new projects,” Ms. Barra concluded. Strengthens Each Company for the Long Term The transaction will allow substantial economies of scale and synergies in purchasing, manufacturing and R&D. Annual synergies of €1.7 Bn are expected by 2026 – of which a significant part is expected to be delivered by 2020, accelerating Opel/Vauxhall’s turnaround. Leveraging the successful partnership with GM, PSA expects Opel/Vauxhall to reach a recurring operating margin3 of 2% by 2020 and 6% by 2026, and to generate a positive operational free cash flow4 by 2020. PSA, together with BNP Paribas, will also acquire all of GM Financial’s European operations through a newly formed 50%/50% joint venture that will retain GM Financial’s current European platform and team. This joint venture will be fully consolidated by BNP Paribas and accounted under the equity method by PSA. The transaction is another step in GM’s ongoing work to transform the company, which has delivered three years of record performance and a strong 2017 outlook, and returned significant capital to shareholders. It will strengthen GM’s core business, support its continued deployment of resources to higher-return opportunities including in advanced technologies driving the future, and unlock significant value for shareholders. By immediately improving EBIT-adjusted, EBIT-adjusted margins and adjusted automotive free cash flow and de-risking the balance sheet, the transaction will enable GM to lower the cash balance requirement under its capital allocation framework by $2 Bn, which it intends to use to accelerate share repurchases, subject to market conditions. GM will also participate in the future success of the combined entity through its ownership of warrants to purchase shares of PSA. GM and PSA also expect to collaborate in the further deployment of electrification technologies and existing supply agreements for Holden and certain Buick models will continue, and PSA may potentially source long-term supply of fuel cell systems from the GM/Honda joint venture. Additional Information Terms of the Agreement Opel/Vauxhall automotive operations will be acquired by PSA for €1.3 Bn. GM Financial’s European operations will be jointly acquired by PSA and BNP Paribas for 0.8 times their pro forma book value at the closing of the transaction, or approximately €0.9 Bn. The transaction has a total value of €2.2 Bn, for Opel/Vauxhall automotive operations and 100% of GM Financial’s European operations. The transaction value for PSA, including Opel/Vauxhall and 50% of GM Financial’s European operations, will be €1.8 Bn. In connection with this transaction, GM or its affiliates will subscribe warrants for €0.65 Bn. These warrants have a nine-year maturity and are exercisable at any time in whole or in part commencing 5 years after the issue date, with a strike price of €1. Based on a reference price of €17.34 for the PSA share5 , the warrants correspond to 39.7 MM shares of PSA, or 4.2% of its fully diluted share capital6. GM will not have governance or voting rights with respect to PSA and has agreed to sell the PSA shares received upon exercise of the warrants within 35 days after exercise. The transaction includes all of Opel/Vauxhall’s automotive operations, comprising Opel and Vauxhall brands, six assembly and five component-manufacturing facilities, one engineering center (Rüsselsheim) and approximately 40,000 employees. GM will retain the engineering center in Torino, Italy. Opel/Vauxhall will also continue to benefit from intellectual property licenses from GM until its vehicles progressively convert to PSA platforms over the coming years. In connection with the transaction, GM will take a primarily non-cash special charge of $4.0-4.5 Bn. Ongoing Pension Fund Commitments All of Opel/Vauxhall’s European and U.K. pension plans, funded and unfunded, with the exception of the German Actives Plan and selected smaller plans will remain with GM. The obligations with respect to the German Actives Plan and these smaller plans of Opel/Vauxhall will be transferred to PSA. GM will pay PSA €3.0 Bn for full settlement of transferred pension obligations. Closing Conditions The transaction is subject to various closing conditions, including regulatory approvals and reorganizations, and is expected to close before the end of 2017. Warrants The issuance of the warrants is subject to the vote of shareholders at PSA’s General Meeting of May 10th, 2017. The three main shareholders of PSA (the French State, the Peugeot family and DongFeng) representing in aggregate 36.6% of the share capital and 51.5%7 of the voting rights of PSA have undertaken to vote in favor of the resolution related to the issuance of the warrants to GM. In the event the warrant issuance reserved to GM and its affiliates is not approved by PSA’s General Meeting, PSA will settle the €0.65 Bn in cash over five years.
  19. 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
  20. 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 View full article
  21. William Maley

    Top Gear's Vauxhall Astra is Up for Sale

    The Vauxhall Astra was the final 'Star in a Reasonably Priced Car' before the whole Jeremy Clarkson 'fracas' imploded the show. Now you have the chance to own this vehicle. Vauxhall put the vehicle up for sale this week on eBay, describing the model as a 1.5L TechLine hatchback with 115 horsepower. The Astra is fitted with a full roll cage along with two Corbeau Sprint Racing seats and five-point safety harnesses. It should be noted the airbags are disabled due to the rollcage. Mileage is listed at 2,908 miles. But considering how much abuse this Astra was put through, we think it should read 2,908,000 miles. During the Astra's time as the 'Reasonably Priced Car', 23 stars took the car around the Top Gear track. Singer Olly Murs was the fastest with a time of 1:44.6. This is closely followed by Nicholas Hoult and Aaron Paul at 1:44.7. At the time of this writing, the current bid stands at £8,000.00 (about $11,365.25) with the reserve not met. Proceeds of the sale will go to automotive support network BEN. Source: eBay, Vauxhall Press Release is on Page 2 GOING, GOING, GONE - AGAIN BBC Top Gear’s Reasonably Priced Vauxhall Astra back up for auction to raise money for BEN 2013 Astra driven by Will Smith and Benedict Cumberbatch New eBay auction opening today: http://www.ebay.co.uk/itm/-/231913252015 The Vauxhall Astra used in the last series of BBC’s Top Gear as their Reasonably Priced Car is up back for sale to raise money for the automotive support network BEN. The 2013 Vauxhall Astra 1.6 was driven by a host of celebrities including Tom Hiddleston, Jack Whitehall and Steven Tyler. The car, donated by Vauxhall Motors, was initially offered for auction late last year, but with the original sale now fallen through, the way is clear for one lucky Top Gear fan to bid for the vehicle on eBay as well as contribute to a worthy cause. BEN is committed to making positive differences to the lives of people within the automotive industry and their dependents. The organisation offers a wide range of free and confidential information, advice and Support Services, along with the provision of residential, nursing and specialist care services at multiple care centres around the UK. David Main, Chief Executive at BEN said: “It is a shame the original sale fell through, but this of course does mean another chance for a Top Gear fan to get their hands on a piece of the show’s history, after all this was the last car to be used in the show’s previous format.” He added: “Who knows, perhaps Chris Evans or Matt Le Blanc may fancy bidding on it themselves?!” With an estimated 350 million views in 170 different countries per week, the 2013 Vauxhall Astra 1.6 was initiated with a star-studded barbeque, featuring celebrities including comedians Jimmy Carr and Warwick Davis, and singers Brian Johnson and Joss Stone. Celebrities such as Olly Murs, who topped the leader board, Margot Robbie, Ron Howard and James Blunt all thrashed it around the Top Gear Test Track at Dunsfold Park, Surrey. The five-door Power Red 1.6-litre 115bhp Vauxhall Astra Tech Line will be auction on eBay, from today for 2 weeks until 28th April, with a reserve of £10,000 - all proceeds from the sale will be donated to BEN. The spec: Mileage – 2,908 17-inch 10-spoke alloy wheels Sat-nav system with seven-inch colour monitor Three-spoke leather-covered sports steering wheel Multi-function trip computer USB connection with iPod control Mobile phone system with Bluetooth Digital radio with six premium speakers Chrome-effect exterior side window surround Front Corbeau Sprint Racing seats with 5 point safety belt harness and full roll-cage IMPORTANT NOTE: Bidders should be aware that the airbags have all been disabled making room for the roll-cage. To re-instate the airbags would involve removing the roll-cage and seating. So, in its current state, the car is not type-approved and should not be driven on the road. The Vauxhall Technical Team will work with the successful bidder at handover to fully explain how the vehicle has been adapted. Please be aware converting the vehicle back into use on the public highway would incur significant cost.
  22. The Vauxhall Astra was the final 'Star in a Reasonably Priced Car' before the whole Jeremy Clarkson 'fracas' imploded the show. Now you have the chance to own this vehicle. Vauxhall put the vehicle up for sale this week on eBay, describing the model as a 1.5L TechLine hatchback with 115 horsepower. The Astra is fitted with a full roll cage along with two Corbeau Sprint Racing seats and five-point safety harnesses. It should be noted the airbags are disabled due to the rollcage. Mileage is listed at 2,908 miles. But considering how much abuse this Astra was put through, we think it should read 2,908,000 miles. During the Astra's time as the 'Reasonably Priced Car', 23 stars took the car around the Top Gear track. Singer Olly Murs was the fastest with a time of 1:44.6. This is closely followed by Nicholas Hoult and Aaron Paul at 1:44.7. At the time of this writing, the current bid stands at £8,000.00 (about $11,365.25) with the reserve not met. Proceeds of the sale will go to automotive support network BEN. Source: eBay, Vauxhall Press Release is on Page 2 GOING, GOING, GONE - AGAIN BBC Top Gear’s Reasonably Priced Vauxhall Astra back up for auction to raise money for BEN 2013 Astra driven by Will Smith and Benedict Cumberbatch New eBay auction opening today: http://www.ebay.co.uk/itm/-/231913252015 The Vauxhall Astra used in the last series of BBC’s Top Gear as their Reasonably Priced Car is up back for sale to raise money for the automotive support network BEN. The 2013 Vauxhall Astra 1.6 was driven by a host of celebrities including Tom Hiddleston, Jack Whitehall and Steven Tyler. The car, donated by Vauxhall Motors, was initially offered for auction late last year, but with the original sale now fallen through, the way is clear for one lucky Top Gear fan to bid for the vehicle on eBay as well as contribute to a worthy cause. BEN is committed to making positive differences to the lives of people within the automotive industry and their dependents. The organisation offers a wide range of free and confidential information, advice and Support Services, along with the provision of residential, nursing and specialist care services at multiple care centres around the UK. David Main, Chief Executive at BEN said: “It is a shame the original sale fell through, but this of course does mean another chance for a Top Gear fan to get their hands on a piece of the show’s history, after all this was the last car to be used in the show’s previous format.” He added: “Who knows, perhaps Chris Evans or Matt Le Blanc may fancy bidding on it themselves?!” With an estimated 350 million views in 170 different countries per week, the 2013 Vauxhall Astra 1.6 was initiated with a star-studded barbeque, featuring celebrities including comedians Jimmy Carr and Warwick Davis, and singers Brian Johnson and Joss Stone. Celebrities such as Olly Murs, who topped the leader board, Margot Robbie, Ron Howard and James Blunt all thrashed it around the Top Gear Test Track at Dunsfold Park, Surrey. The five-door Power Red 1.6-litre 115bhp Vauxhall Astra Tech Line will be auction on eBay, from today for 2 weeks until 28th April, with a reserve of £10,000 - all proceeds from the sale will be donated to BEN. The spec: Mileage – 2,908 17-inch 10-spoke alloy wheels Sat-nav system with seven-inch colour monitor Three-spoke leather-covered sports steering wheel Multi-function trip computer USB connection with iPod control Mobile phone system with Bluetooth Digital radio with six premium speakers Chrome-effect exterior side window surround Front Corbeau Sprint Racing seats with 5 point safety belt harness and full roll-cage IMPORTANT NOTE: Bidders should be aware that the airbags have all been disabled making room for the roll-cage. To re-instate the airbags would involve removing the roll-cage and seating. So, in its current state, the car is not type-approved and should not be driven on the road. The Vauxhall Technical Team will work with the successful bidder at handover to fully explain how the vehicle has been adapted. Please be aware converting the vehicle back into use on the public highway would incur significant cost. View full article
  23. By William Maley Staff Writer - CheersandGears.com April 1, 2013 Alfa Romeo is reportedly a part of a deal that is currently under negotiations between Fiat and Audi. Sources close to the situation tell Wards Auto the deal involves Alfa Romeo and Fiat’s Pomigliano assembly plant which currently makes the Fiat Panda. If the deal was to go through, this would mark the return of Alfa Romeo production under Audi. Also on the table is Fiat’s Magneti Marelli parts unit. Fiat CEO Sergio Marchionne has mentioned before that he would be willing to let go of its parts arm in order to raise cash. Audi has gone on the record saying that it would like acquire a components manufacturer and establish a new R&D arm in Italy, where it now has a considerable stake thanks to Lamborghini and Ducati. When asked for comment, both Fiat and Audi declined to. Source: Wards Auto William Maley is a staff writer for Cheers & Gears. He can be reached at william.maley@cheersandgears.com or you can follow him on twitter at @realmudmonster. View full article
  24. By William Maley Staff Writer - CheersandGears.com April 1, 2013 Alfa Romeo is reportedly a part of a deal that is currently under negotiations between Fiat and Audi. Sources close to the situation tell Wards Auto the deal involves Alfa Romeo and Fiat’s Pomigliano assembly plant which currently makes the Fiat Panda. If the deal was to go through, this would mark the return of Alfa Romeo production under Audi. Also on the table is Fiat’s Magneti Marelli parts unit. Fiat CEO Sergio Marchionne has mentioned before that he would be willing to let go of its parts arm in order to raise cash. Audi has gone on the record saying that it would like acquire a components manufacturer and establish a new R&D arm in Italy, where it now has a considerable stake thanks to Lamborghini and Ducati. When asked for comment, both Fiat and Audi declined to. Source: Wards Auto William Maley is a staff writer for Cheers & Gears. He can be reached at william.maley@cheersandgears.com or you can follow him on twitter at @realmudmonster.

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