What’s the selling price tag for a large automaker’s entire European operations? $ 2 billion, apparently — one billion in money and an additional billion in gained liabilities.
That is the valuation that General Motors and PSA Group are discussing as the American automaker attempts to unload its Opel and Vauxhall divisions, Bloomberg reports.
Sources close to the discussions claim an agreement could be reached as soon as subsequent Thursday. That’s when PSA releases its 2016 earnings report.
However, there’s no shortage of sticking points that could sink the deal. The sources claim issues like pension liabilities, brand worth and savings possible have however to be hammered out.
Germany was shocked to understand of GM’s plans earlier this week, with politicians joining Opel’s performs council and union in expressing concern — bordering on outrage — more than the American company’s failure to seek the advice of them. The sources claim that GM will require to stroll a economic tightrope. On one side, the price has to be low enough for PSA to shake hands, but there also requirements to be expense savings that Germany, Britain and the unions can agree on. A tall order.
Neither nation desires to see any if the assembly plants close, nor drop any of its workforce. Three Opel plants are situated in Germany, whilst Britain hosts two Vauxhall plants.
Whilst an acquisition of Opel/Vauxhall by PSA would assist the companies seize a greater European market share while sharing technology, some merchandise — and the factories in which they’re built — might not have a long lifespan.
“We are prepared to conduct talks with PSA in the case of an acquisition openly and in a constructive manner and to bring those talks to a conclusion as soon as possible,” said Wolfgang Schaefer-Klug, Opel’s top labor representative, stated in a statement these days.
“Our objective need to be to seize the current possibilities to safeguard employment and internet sites to produce a profitable Opel/Vauxhall.”
What the sell-off implies for Buick, which relies heavily on Opel for its U.S. lineup, is up for debate. TTAC, of course, has a handful of ideas.