For PSA, owner of the Peugeot, Citroen and DS brands, acquiring GM's Opel and Vauxhall brands would give it a Any deal would have to overcome financial, industrial and political obstacles.
Germany's industrial union IG Metall on Tuesday fired a warning shot, saying that if the companies were discussing the sale of Opel without the union's involvement, that would be an "an unprecedented breach of all German and European co-determination rights.
The French government, which owns 14 percent of PSA, could support a deal that would help PSA reach "critical mass," an economy ministry source told Reuters. The government will "give special attention to the impact in terms of jobs and the industrial impact of these initiatives," the source said. France is in the midst of a heated national election campaign. A spokesman for the Peugeot family, which holds a matching stake in the carmaker, was not immediately available.
It was not clear what price GM might want for the loss-making European business, or what structure a deal could take. Both companies cautioned in statements that no deal is certain, but investors cheered the disclosure, sending shares in PSA, owner of the Peugeot and Citroen brands, up 3.
Shares in Fiat Chrysler Automobiles NV rose 3. Fiat Chrysler Chief Executive Sergio Marchionne has campaigned for more than a year for GM to combine with his company.
For GM, selling Opel would be the most dramatic demonstration yet of Chief Executive Mary Barra's strategy of putting profitability and returns on invested capital ahead of market share. Since taking over as GM's CEO in JanuaryBarra has signed off on decisions to quit markets, including Russia and Indonesia, where GM lost money, pull the Chevrolet brand out of Europe, and slash sales to rental car fleets that long propped up U.
GM's global market share slipped by 0. Selling Opel and Vauxhall, which added almost 1 million cars to its sales, could mean abandoning the global volume race in which it is currently ranked third behind Volkswagen and Toyota Motor Corp, with just over 10 million vehicles delivered last year.
InBarra and GM's board quelled an attempt by an investor group to install representatives on the automaker's board by agreeing to return more cash to shareholders, and to gm buy back shares from government 20 percent or better returns on invested capital. Prize money pga players championship executives said that measure drives them to put more money into high profit markets, such as trucks and SUVs in the United States, or growth opportunities such as developing autonomous cars for ride 100 win binary option graph, and less in low-earning businesses.
GM Europe has been a drag on the automaker's global profitability sincethe last mprc forex ebook Opel and Vauxhall recorded a net profit. GM restructured its European operations over the past six years, shutting Opel factories in Belgium and Germany and withdrawing the Saab and Chevrolet brands from sale. Still, GM Europe failed to break even inas Barra had once promised it would, and the company said last week it did not expect profits in the operation until Going forward, GM faces the prospect of heavy investments to comply with European government and consumer demands for cleaner diesel vehicles, and to catch up with a rapid shift toward sport utility vehicles.
GM had previously discussed a sale of its European auto business to Canadian parts maker Magna in the aftermath of the financial crisis, when GM was heading toward a U. But GM pulled the plug on the tentative deal in GM and PSA have already shared production of commercial vans and developed common vehicle platforms, a relic of their last attempt to forge a broader alliance, which was unwound in with the sale of the U. Selling Opel would free up GM to invest more to develop vehicles for the North American and Chinese markets, where it makes nearly all of its automotive profits, as well as to expand new businesses.
It remains unclear how PSA would cut costs in a combined group. France's PSA has 10 factories in Europe and General Motors has 11 plants. Under Chief Executive Carlos Tavares, PSA has rebounded from a brush with bankruptcy to reach record levels of earnings, posting a 6. Additional reporting by Gilles Guillaume and Laurence Frost in Paris and Gm buy back shares from government White in Detroit; Writing by Laurence Frost; Editing by Keith Weir and Tom Brown.
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Money Home Retirement Lipper Awards Analyst Research Stock Screener Fund Screener. Health Sports Arts Entertainment Oddly Enough. Pictures Home The Wider Image Photographers Focus GM in talks to sell European auto business to Peugeot. But, as Ivor Bennett reports, any deal would have to overcome financial, industrial and political obstacles. Autos Tue Feb 14, 6: A combination picture shows the logos of Opel and Peugeot car manufacturers at dealerships of the brands in Strasbourg, France, February 14, A Peugeot car is pictured at the Opel plant in Bochum October 22, The Thomson Reuters Trust Principles.
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