Don't miss

Replay


LATEST SHOWS

EYE ON AFRICA

President Robert Mugabe emerges from house arrest

Read more

MEDIAWATCH

Harassment and hypocrisy in Washington

Read more

THE WORLD THIS WEEK

Military pressures Robert Mugabe to step down, Macron mediates Lebanon crisis

Read more

FRANCE IN FOCUS

France raises a glass to tourism

Read more

FOCUS

France's newest political party accused of 'old' methods

Read more

#THE 51%

Hear me roar: The growing economic power of older women

Read more

#TECH 24

The future of surgery

Read more

DOWN TO EARTH

The tiny parasite threatening your salmon sushi

Read more

ENCORE!

Director Joachim Trier: True horror is a 'lack of self-acceptance'

Read more

Business

Peugeot to buy GM's Opel, creating 2nd-largest European carmaker

Text by NEWS WIRES

Latest update : 2017-03-06

General Motors Co. is selling its loss-making European car business - including Germany's Opel and British brand Vauxhall - to French automaker PSA group.

The 2.2 billion euro ($2.33 billion) deal announced Monday in Paris by GM and PSA - maker of Peugeot and Citroen cars - will realign the industry and create Europe's No. 2 automaker after Volkswagen. The combined company could make 5 million cars a year.

PSA will join with French bank BNP Paribas in the purchase, which foresees taking over 12 manufacturing facilities that employ about 40,000 people, according to a joint statement by the companies.

Amid concerns about job losses in multiple countries, PSA CEO Carlos Tavares promised to keep existing GM commitments to workers.

GM will keep its manufacturing center in Turin, Italy. GM and PSA, which have had joint activities in the past, will continue to collaborate on electric car technologies and maintain existing supply agreements on some Buick models.

The purchase marks a major turnaround for PSA, bailed out just three years ago by Chinese investors and the French state. CEO Tavares hopes to parlay his success at PSA to similar savings at Opel, cutting costs through scale and better use of factory capacity.

The deal suggests GM chief Mary Barra has decided profits are more important than market share. GM has not turned a full-year profit in Europe since 1999.

"For GM, this represents another major step in the ongoing work that is driving our improved performance and accelerating our momentum," General Motors Co. Chairman and CEO Mary Barra said in the statement.

The deal, subject to regulatory approval, is expected to be completed at the end of this year.

The move would give PSA access to technology and a larger scale to spread out engineering and other costs. The companies said they expect annual savings of 1.7 billion euros by 2026.

The price for Opel seems relatively small because of a big pension contribution for Opel's underfunded plan.

(AP)

Date created : 2017-03-06

  • FRANCE

    French government, China's Dongfeng to invest in Peugeot

    Read more

  • FRANCE - IRAN

    French car firms take on US in race for Iranian market

    Read more

  • AUTO INDUSTRY

    GM to take 7% stake in alliance with Peugeot

    Read more

COMMENT(S)