GM Considers Selling Opel Brand to French PSA Group
Opel, parlez-vous français?
Opel isn’t really feeling the love this Valentine’s Day, as in a meeting with General Motors and French automaker PSA Group, which is made up of Peugeot, Citroën, and DS, among other cooperative initiatives, the two companies discussed whether or not PSA should buy Opel, GM’s Germany-based European brand.
This news immediately raised controversy, bringing in protests from Germany’s industrial union IG Metall, which called such a discussion without the union’s involvement “an unprecedented breach of all German and European co-determination rights,” as well as from the German government, which said that such talks were unacceptable without consulting German works councils or local government.
On the other hand, the French government seems pretty cool with it. France owns 14% of PSA, and said it could support a move that would give the French automaker PSA Group a “critical mass.” Investors also seemed to agree with the possible plan, with GM shares rising 3.5% in New York trading.
Opel, despite giving us hot-off-the-press topical references like the Grumpy Cat press releases and the Grumpy Car, has unfortunately long fallen short of being a money-maker for GM in Europe, since the last time the company posted a net profit was 1999.
GM attempted to boost the company’s earnings by restructuring its entire European strategy, shutting Opel factories in Belgium and Germany and withdrawing Saab and Chevrolet from the market. Unfortunately, the brand again ran into trouble, as Brexit created turmoil, public demand for SUVs has exploded, and the demand for cleaner diesel engines required heavy investments; all these games changers have wracked Opel.
Both companies have stressed that nothing in this case is certain.