GM in discussions to sell Opel to PSA

[Raza]

I agree with Kevin.

Bring back Saab!

[Eye of the Tiger]

I agree with Kevin.

Bring back Saab!

Okay, but only if GM stays out of it.

[2o6]

Saab killed themselves. Saab was trash, and that's not GM's fault. They spent a lot of money on products that made no sense.

[Eye of the Tiger]

Saab killed themselves. Saab was trash, and that's not GM's fault. They spent a lot of money on products that made no sense.

True. Bullshit. Yes it was GM's fault.
Like the Saab Trailblazer? Ok. What else?

[2o6]

True. Bullshit. Yes it was GM's fault.
Like the Saab Trailblazer? Ok. What else?

The fact that a lot of Saab products were substantially different from their GM counterparts for no good reason. The had a lot of parts diversity, but the end result was no better than where they started. Yet the Saab ended up more expensive to make.


If anything the 9-7x and 9-2x were their better products.

[Raza]

Your exact words were:

Saab

Which can really only mean "Bring back Saab, because they made a superior product that was underappreciated by know-nothing fools."

[Galaxy]

Your exact words were:

Which can really only mean "Bring back Saab, because they made a superior product that was underappreciated by know-nothing fools."

Like the manual transmission?

[Raza]

Like the manual transmission?

Indeed. Oh how I miss them.

[SJ_GTI]

I feel like those Saab 9-3's from the early/mid 2000's are still very good looking cars. In retrospect I regret buying the GTI when I did. I should have went with a Saab 9-3 Aero. I test drove one (with the 2.8T IIRC) and loved it but they only had automatics on hand so I never bothered to go back again.

[12,000 RPM]

Which GTI did you get? I think anything from the MKV on (2006+) was better than Saabs.

Those Saabs were torquey as shit though, but too fucking weird.

[SJ_GTI]

Which GTI did you get? I think anything from the MKV on (2006+) was better than Saabs.

Those Saabs were torquey as shit though, but too fucking weird.

It was a MKV (2008 model year IIRC). I liked the GTI but feel like I missed an opportunity of driving something a little different.

[AutobahnSHO]

If anything the 9-7x and 9-2x were their better products.

Saabarus??

[MX793]

Saabarus??

Saabblazer and Saabaru.

[2o6]

welp

http://jalopnik.com/general-motors-finally-strikes-a-deal-to-sell-opel-to-f-1792960880

[2o6]

http://www.autoblog.com/2017/03/06/gm-selling-opel-vauxhall-to-peugeot-citroen-group/?hcid=hp-tile-large


Confirmed

[SJ_GTI]

Definitely curious to see how this impacts Buick models that get rolled out in the future. I assume they will become more affiliated with Chevy rather than Opel.

[2o6]

Definitely curious to see how this impacts Buick models that get rolled out in the future. I assume they will become more affiliated with Chevy rather than Opel.

Only the Regal is Opel adjacent, and the Cascada.


The Envision is Chinese.


The Lacrosse is American engineered.

The Encore shares far more with GM Korea rather than GM Europe

[ifcar]

Definitely curious to see how this impacts Buick models that get rolled out in the future. I assume they will become more affiliated with Chevy rather than Opel.

The BBC reported that various model collaborations, including for Buick, will continue.

[93JC]

There will probably be a licencing agreement in place to continue sharing GM's IP, with a time limit and/or a guarantee from Opel/PSA that they'll continue producing some number of engines, body panels, etc. as required for GM's production. Which probably isn't much, really. As pointed out above people are thinking "What about Buick?" but in reality the only Buick produced by Opel is the Cascada.

For the foreseeable future probably nothing changes, except GM will probably kill the Buick Cascada if they haven't already and that will be no great loss. What will be interesting to see is what happens with Opel in about five years' time. Will they continue sharing GM powertrains, or will PSA put their foot down and want more commonality with Peugeot and Citroen products? A lot about how well this will go will hinge on how much of the IP GM will take with them and whether or not PSA can make the necessary job cuts to make Opel profitable. GM couldn't make it happen and I don't see how PSA will.

I'm quite surprised at the stock market reaction to this news: GM shares were down 0.84%, while PSA's were up 2.73%.

[SJ_GTI]

I'm quite surprised at the stock market reaction to this news: GM shares were down 0.84%, while PSA's were up 2.73%.

If I understand the press release its sounds like GM is paying PSA to take over Opel. GM has to immediately contribute more to the Opel pensions than they are receiving from PSA/BNP, and then GM is still on the hook for contributions in the future.

It does also sound like GM has (what are essentially) stock options in PSA in the event it all works out well, so GM actually has a stake in making the new PSA a success. This is probably sufficient incentive for GM to do their part to make Opels transition smooth.

[93JC]

If I understand the press release its sounds like GM is paying PSA to take over Opel. GM has to immediately contribute more to the Opel pensions than they are receiving from PSA/BNP, and then GM is still on the hook for contributions in the future.

I don't remember seeing anything about that in the press release... It sounded to me that the pension contributions from GM are a one-time 'top-up' and PSA will inherit the rest of the liabilities (~$10B, less GM's contribution).

It does also sound like GM has (what are essentially) stock options in PSA in the event it all works out well, so GM actually has a stake in making the new PSA a success. This is probably sufficient incentive for GM to do their part to make Opels transition smooth.

Also didn't see any of this in the press release. What press release are you looking at? 


EDIT: Okay, I'm reading the Reuters release, and I see it now. http://www.reuters.com/article/us-opel-m-a-psa-idUSKBN16D0J1

The transaction also sees GM retain most of Opel's pensions deficit, estimated by analysts at $10 billion. Earlier in the talks, the U.S. carmaker had sought to offload a larger share of the liabilities, sources said.

Some smaller pension funds will be transferred to PSA, along with a 3 billion euro payment to cover their full settlement, the companies said on Monday.

[...]

The PSA warrants, exercisable in five years and maturing in nine, provide a financial incentive for GM to continue cooperating. The U.S. carmaker has agreed to sell the shares received upon exercise, keeping no stake in PSA.

Weird. I don't get it.

[SJ_GTI]

Weird. I don't get it.

Re: the "stock options," its just in incentive for GM to not undermine the new PSA/Opel company. If GM makes it painful for Opel to separate or merge in to PSA the warrants are worthless. If GM operates in good faith and the PSA/Opel merger is a wild success they can make out like bandits (~4.6% of the company). Note that GM does not have the right to retain the stock...the agreement says that if they do exercise the warrants they have to sell them ASAP (30 days IIRC). Pretty smart on PSA's part IYAM.

[93JC]

I get that part; I don't get why GM would keep all the pension liabilities. Seems like a terrible deal for GM. The only way it makes even a semblance of sense is GM keeps all the IP. PSA probably doesn't even give a shit about using GM's technology anyway.

[SJ_GTI]

I get that part; I don't get why GM would keep all the pension liabilities. Seems like a terrible deal for GM. The only way it makes even a semblance of sense is GM keeps all the IP. PSA probably doesn't even give a shit about using GM's technology anyway.

That goes back to what I explained way before. If a company just doesn't see a way to make one of its divisions profitable it is sometimes easier to just give it away (or even pay someone else to take it). If GM is right and Opel is not only worthless...but worth less than nothing (ie: there is no real way to make them earn a profit) then at least now it is someone else's problem. If they are wrong and PSA is able to turn things around GM can earn back some of those pension liabilities they are on the hook for (via the stock options).

[93JC]

Mm, evidently GM believes Opel is ultimately an unsalvageable basket case. Can't say they're wrong either, I looked at the 2015 annual report and it was immediately apparent how much of a boat anchor Europe was to the bottom line...

[12,000 RPM]

It is weird that they are dropping out of the worlds biggest market. That kind of uncompromising pragmatism takes balls (ovaries?) in this day and age.

[MrH]

US and China are both bigger than Europe.  I don't think I'd call Europe one market either.

[Galaxy]

The German media is widely reporting that Opel CEO Karl-Thomas Neumann will resign once the sale to PSA is completed. Apparently it has become apparent to Neumann in the last few days that PSA wants to micro manage Opel from Paris, and his reaction to that is Oh, no, not with me. I think Opel has done well under Neumann considering the tight restrictions the company is operating in. It looks increasingly likely that Audi will need a new CEO soon so.... 

[Galaxy]

Opel has now confirmed this, however Neumann will step down as CEO with immediate effect, he will still be an Executive until the sale is completed.