[car fanatics]

Source
Photo credit: General Motors
March 9, 2012
By: CF Staff

Attention U.S. taxpayers: You now own a piece of a French car company that is drowning in red ink. That's right. In a move little noticed outside of the business pages, General Motors last week bought more than $400 million in shares of PSA Peugeot Citroen - a 7 percent stake in the company.

Because U.S. taxpayers still own roughly one-quarter of GM, they now own a piece of Peugeot.

Peugeot can undoubtedly use the cash. Last year, Peugeot's auto making division lost $123 million. And on March 1 - just a day after the deal with GM was announced - Moody's downgraded Peugeot's credit rating to junk status with a negative outlook, citing "severe deterioration" of its finances. In other words, General Motors essentially just dumped more than $400 million of taxpayer assets on junk bonds.

[The Voice of Doom]

If it means selling more Chevies in France this will eventually make sense. I scratched my head at GM buying a bankrupt Daewoo several years ago but they did a nice job folding them into a global network. It's also a pretty strong shot across Opel's bow-"shape up or ship out."

[ReaganLogan]

The Voice of Doom;186831 Wrote:If it means selling more Chevies in France this will eventually make sense. I scratched my head at GM buying a bankrupt Daewoo several years ago but they did a nice job folding them into a global network. It's also a pretty strong shot across Opel's bow-"shape up or ship out."

Agreed, Opel has had its time and now they need to grow up...

[Chevroletguy]

The Voice of Doom;186831 Wrote:If it means selling more Chevies in France this will eventually make sense. I scratched my head at GM buying a bankrupt Daewoo several years ago but they did a nice job folding them into a global network. It's also a pretty strong shot across Opel's bow-"shape up or ship out."

You have to wonder now that if Opel continues to fail and is phased out, will Buick become the American Peugot/Citroën

[The 'Burg]

I am really not understanding the mentality here...

Let SAAB go bankrupt;
Opel is deep in the red;
So let's invest in Peugeot, which is also deep in the red.

How does this send a message to Opel when Opel is already wholly owned by GM? Isn't that basically GM sending a message to itself?

Opel makes nice solid products. What they need is nice solid marketing. I also think that Opel, Holden & Buick China need to have consolidated product lines. An HSR version of the Chinese Buick Park Avenue would make a very nice autobahn-ready Opel Senator.

[Cmicasa the GreatXvX]

what I don't understand is why so many of U lack the basic understanding of economies of scale. GM is large.. largest of them all worldwide.. but the European operations needed more leverage to overcome the deficiencies left by the higher costing labor costs. In other words if U can't drop costs on labor U drop costs on supplies. $423 Million??? Please... that little tiny amount will be recovered in one year considering the savings.

This is EXACTLY the same situation that screwed GM into a BK back in '09. The Economy.. at the time being the U.S... now the European... would not allow profitability to be obtained in the time period needed to avoid BK. Supplier costs remained the same... labor costs remained the same... BK was the route to go to drop both.

This time around, GM doesn't wish to send Opel thru such a thing.. nor can they drop labor costs with the IG Metal with their current rate of volume in Europe. Banning up with PSA gives them that leverage. Only VW, in Europe, has the volume and leverage to pull this off alone. And that is debatable with the economic situation getting worse daily there. Having actual luxo brands being profitable and selling in volume gives them that edge. GM, has that ability here currently, and will be even more of a powerhouse here and in China.. S. America with a resurgent Cadillac and Buick/GMC.

Renault/Nissan had to deal with the same thing for basically the same reasons. Fiat is currently trying to do the same due to costs. Ford is set to lose over $600 Million in Europe next year. Companies like Toyota are not having as many issues because their market share is very low and they build more outside of Europe


VW Group 23.7%
PSA Group 11.7%
Renault 10.7% (with Nissan's 3.3%= 14%)
GM Group 8.2%
Ford Group 7.5%
FIAT Group 6.3%
BMW Group 6.2%
Daimler Group 5.2%
Hyundai/Kia 5.5%
Toyota & Lexus 4.2%

[ReaganLogan]

The 'Burg;186844 Wrote:I am really not understanding the mentality here...

Let SAAB go bankrupt;
Opel is deep in the red;
So let's invest in Peugeot, which is also deep in the red.

How does this send a message to Opel when Opel is already wholly owned by GM? Isn't that basically GM sending a message to itself?

Opel makes nice solid products. What they need is nice solid marketing. I also think that Opel, Holden & Buick China need to have consolidated product lines. An HSR version of the Chinese Buick Park Avenue would make a very nice autobahn-ready Opel Senator.

Actually, what Opel needs is to be out of Germany and away from the harshest unions in the Auto world...

Then maybe they can make a profit...

[Cmicasa the GreatXvX]

Oh.. and SAAB was sold.. no longer a GM subsid... why would they save it from BK when it wasn't even their brand anymore?