According to Reuters, the PSA Group (Peugeot and Citroën) approved a deal where General Motors agreed to sell its Opel and Vauxhall brands to the PSA Group.
The French company struck a 2.2bn euro (£1.9bn) deal to buy General Motors’ European unit, including Vauxhall.
GM Europe has not made a profit since 1999 and the deal has raised fears about job losses at Vauxhall.
With GM’s Opel and Vauxhall operations, PSA Group would become the second largest carmaker in Europe, behind Volkswagen.
It is unclear whether the sale indicates GM would essentially give up the Europe market. GM Europe, primarily the Opel and Vauxhall brands, has lost money for 16 consecutive years. Cadillac has close to zero market share there, and as of last year Chevrolet no longer sells any cars in Europe aside from the Corvette. Whether GM sells the Opel Vauxhall entirely (as Ford sold 100 percent of Jaguar and Land Rover to Tata) or completes a merger that would let it retain a stake in PSA, the two former GM brands will inevitably face aggressive cost-cutting measures that will further shed jobs, close factories, and shrink model lineups.
In a statement, Carlos Tavares, chairman of PSA’s managing board, said: “We are confident that the Opel/Vauxhall turnaround will significantly accelerate with our support, while respecting the commitments made by GM to the Opel/Vauxhall employees.”
PSA said it would return Opel and its Vauxhall brand to profit, and expected to make savings of £1.47bn per year by 2026, with most of the cuts made by 2020.
Mr Tavares told the BBC that he trusted the Vauxhall staff to work in a “constructive manner” with PSA to improve their performance.
“As long as we improve the performance and we become the best, there is no risk they should fear.”
It has emerged the Prime Minister Theresa May spoke with the chief executive of GM, Mary Barra on Sunday, when she reiterated that she wanted jobs at both plants to be secured for the long term.
In a statement, Mrs May’s office said: Ms Barra made clear that Vauxhall would remain a British brand and that the deal would recognise and respect all agreements regarding the workforce.”
Opel will have to ‘copy paste’ our model – Peugeot Chief.
Peugeot can help Opel reverse ten years of red ink by showing the European brand how it achieved its own turnaround, the chief executive officer (CEO) of Peugeot parent PSA group told CNBC on Tuesday.