Wedding bells for GM and French
NEW YORK – General Motors and PSA Peugeot Citroën have announced a long-term and broad-scale global strategic alliance to benefit from the combined strengths and capabilities of the two companies.
The union will also, they say, contribute to the profitability of each and strongly improve their competitiveness in Europe.
There are two main pillars: shared vehicle platforms and parts and the creation of a global purchasing unit “for commodities, components and other goods and services from suppliers”.
Plenty of purchasing power there: the two companies spend about $125-billion a year. Each company will continue to market and sell its vehicles independently and competitively.
To finance the marriage, PSA Peugeot Citroën needs about €1-billion through a capital increase with preferential subscription rights for shareholders of PSA Peugeot Citroën, underwritten by a syndicate of banks and including an investment from the Peugeot Family Group as a sign of their confidence.
As part of the agreement, which includes no specific provision regarding the governance of PSA Peugeot Citroën, GM plans to acquire a seven-percent equity stake in PSA Peugeot Citroën, making it the second largest shareholder behind the Peugeot Family Group.
Dan Akerson, GM chairman and CEO, said: “This partnership brings tremendous opportunity for our companies and positions GM for long-term sustainable profitability in Europe.”
Philippe Varin, chairman of the managing board of PSA Peugeot Citroën, said: “This partnership is rich in development potential. The whole group is mobilised to reap the full benefit of this agreement.”
The initial focus will be on small and midsize cars, MPVs and crossovers with immediate consideration of a common platform for clean-exhaust vehicles to launch by 2016.
“This alliance,” the media release emphasised, “enhances but does not replace either company’s independent efforts to return their European operations to sustainable profitability.”
The companies will also investigate joint logistics and transport. GM intends to establish co-operation with Gefco, a logistics company and subsidiary of PSA Peugeot Citroën, to service GM in Europe and Russia.
Cost savings are expected to reach $2-billion a year within five years though with limited benefit for the first two years and the alliance will be supervised by a global steering committee made up of an equal number of senior representatives from both companies.
Implementation is subject to regulatory approvals in some jurisdictions as well as notification to the appropriate workers’ councils.
PatPion - 2012-03-01 11:03
This could be quite significant for our local market.
Thando - 2012-03-01 13:51
If it works you might get French Styling with Opel engineering. If it doens't you'll get opel styling and french reliability........
daveneethling - 2012-03-01 14:37
Either way you're guaranteed excellent quality and style. If that's not for you then buy a VW.
Thando - 2012-03-01 16:12
Thanks for the advice. I shudder at the thought of a Opeugeot. Or maybe it will be called a Peupel ?
robbie.crouch - 2012-03-01 16:14
Now even less likely to buy any of the 3.
Oistar - 2012-03-02 12:42
so this is the beginning of the end for Peugeot and Citroen> Damn, I liked their cars. But every company that GM gets its hands on is brought down to bankruptcy a few years later. GM is the parasite that destroys all its competition.
Funny that this comment never got past news24 eds yesterday - hmm, GM also has a hand in news24?
werner.bezuidenhout - 2012-03-05 11:32
I dont like french cars. I bought an Opel because of it being German and good engineering. I will sell my Opel and rather get a VW or Merc instead. Stay away from french cars. They brake down easily, and if they do, it is unbelievably costly to repair. No to French...