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VOL. 41 | NO. 9 | Friday, March 03, 2017
AP Sources: PSA expected to announce Opel purchase on Monday
DETROIT (AP) — French carmaker PSA Group is expected to announce Monday that it has purchased General Motors' money-losing European car business, according to two people briefed on the matter.
The announcement could still be delayed by last-minute snags but is likely to be made in France, said one of the people. Both people requested anonymity because the deal hasn't been formally announced.
The purchase price and exact terms of how the Opel and Vauxhall brands would be transferred to PSA were not available Friday afternoon. But a research-sharing agreement is likely to be included because numerous GM vehicles are at least partly engineered in Germany.
A PSA spokeswoman on Friday would say only that "no communication on Opel is expected until Monday." Both companies confirmed last month that they were in talks about a sale.
GM has not turned a full-year profit in Europe since 1999, and since then has lost billions battling high labor costs and an intensely competitive auto sales market. The company has said it hopes to break even there next year.
PSA Chairman Carlos Tavares said in February that he hopes to create a "European car champion" with the combination and pledged to work with governments and unions that are worried about job cuts.
"Opel has been making red ink for 10 years, and burning approximately 1 billion in cash every year," Tavares said. "We believe we can help."
The move would give PSA access to technology and a larger scale to spread out engineering and other costs.
Pulling out of Western Europe, the world's third-largest auto market, is consistent with GM's plans to focus on bigger profit margins rather than sales and market share.
It's not clear whether GM would leave Europe entirely or still be able to sell some Chevrolet or Cadillac models.