The French carmaker has completed its takeover of GM's European subsidiaries ahead of time, naming a new management to chart an attempted turnaround for the two struggling brands.
French automaker PSA said Tuesday it had finalized the takeover of rival brands Opel and Vauxhall which makes the group Europe's second-biggest carmaker after Volkswagen.
The owner of the Peugeot, Citroen and DS brands agreed in early March to pay some 1.3 billion euros ($1.46 billion) for Opel, a storied German firm owned by US auto giant General Motors (GM) for decades, as well as its British subsidiary Vauxhall. Initially, the deal was to close by the end of the year.
PSA announced it completed the deal "ahead of time," and had installed PSA executives Remi Girardon as Vice President of Manufacturing and Philippe de Rovira as Opel's new Chief Financial Officer.
"We are witnessing the birth of a true European champion today," PSA Chairman Carlos Tavares said in a statement, adding that the company would "assist Opel and Vauxhall's return to profitability and aim to set new industry benchmarks together."
Opel and Vauxhall employ some 35,600 workers between them at 10 factories across Europe, around half of them at three plants in Germany. The two brands now have 100 days to draw up a strategic plan which is expected to build on synergies for the new group.
Economies of scale
Despite being a familiar sight on roads in Germany and Britain, Opel/Vauxhall has not booked a profit since 1999. Last week former Opel parent GM said it lost about $800 million in Europe in the second quarter, including charges related to the planned sale of Opel.
For GM the sale marks a retreat from Europe, and a departure from the goal of being among the world's largest carmakers by sales. Since taking over as GM's CEO in January 2014, Mary Barra has withdrawn from markets including Russia and Indonesia, and pulled the Chevrolet brand out of Europe.
Following the PSA takeover, Opel announced it is planning a "much leaner" management structure which aims to unlock economies of scale and synergies in purchasing, manufacturing and research and development estimated at 1.7 billion euros.
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, Opel said in a statement.
For PSA, buying Opel gives it control over a struggling joint venture which once attempted to co-develop 40 cars and vans with General Motors. The alliance, first unveiled in 2012, was rapidly scaled back to three shared projects.
GM and its European operations will not sever ties completely. Opel has committed to producing Buick-branded vehicles in German factories for General Motors well beyond 2019.
uhe/tr (Reuters, AFP, dpa)