Sun, Mar 05, 2017 - Page 16 News List

Sources say PSA Group to announce Opel purchase

AP, DETROIT, Michigan

French automaker PSA Group is expected to announce tomorrow that it has purchased General Motors Co’s (GM) 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, one of the people said.

The purchase price and exact terms of how the Opel and Vauxhall brands would be transferred to PSA were not available on Friday afternoon. However, 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 only said that “no communication on Opel is expected until Monday.”

Both companies last month confirmed that they were discussing 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 last month said 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.

The move would give PSA access to technology and a larger scale to spread out engineering and other costs.

“Opel has been making red ink for 10 years, and burning approximately US$1 billion in cash every year,” Tavares said. “We believe we can help.”

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