PSA and GM have announced the completion of the planned sale of Opel Automobile GmbH with its brands Opel and Vauxhall by General Motors to Groupe PSA. PSA has also announced senior management changes.
“We have set ourselves the clear target of returning to profitability by 2020.”
“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.”
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In a statement, PSA chief Carlos Tavares said the new combination will be a “true European champion” and targeted a return to profitability for the currently loss-making Opel/Vauxhall operations.
“We will assist Opel and Vauxhall’s return to profitability and aim to set new industry benchmarks together,” he said. “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 PSA is now around 17% in Europe (see table below), making it the continent’s second largest carmaker with first or second place in main markets.
PSA said 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, PSA says. The combined entity will unlock substantial economies of scale and synergies in purchasing, manufacturing and R&D are estimated at an EUR1.7bn 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.
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By GlobalDataManagement changes
Today’s announcement was accompanied by 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.
- Remi 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.
Opel CEO Michael Lohscheller is planning ‘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.”
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.
General Motors said ‘the sale represents a win for all stakeholders and is the latest and most significant in a series of actions GM has taken to strengthen its global enterprise and position itself for the future, while immediately improving the company’s financial performance.’
“We’ve taken another bold step in our ongoing work to transform GM,” said GM President Dan Ammann. “This transaction allows us to sharply focus our resources on higher-return opportunities as we expand our technical and business leadership in the future of mobility.”
In parallel, the acquisition by PSA of 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.
Scale drives PSA’s Opel ambitions – COMMENT
