Peugeot’s RCZ Photo Courtesy of M93
General Motors made a seemingly painful decision to sell its European operations to the French manufacturer Peugeot and Citroen automobiles. Painful, but not difficult given the information GM has been staring at for years. Consider the facts. Germany’s Opel and Britain’s Vauxhall have lost $22.4 billion over the past 17 of 20 years GM has owned the unit. Through this sale, GM will gain at least $2.3 billion — paltry compared with its losses. But those losses are at least stemmed with the sale to PSA and French bank BNP Paribas (BNPQF). PSA will now become the second-largest automaker in Europe behind VW.
The 1974 DS20 Photo Courtesy of Lothar Spurzem
GM President Don Amman correctly stated that he wanted to sell the European operations because differing consumer tastes and government regulations meant that vehicles produced for the European market were inconsistent to models GM was selling elsewhere.
To be fair, this is not a great deal for GM, who will retain most of Opel and Vauxhall’s pension commitments and pay PSA $3.2 billion to offload smaller pension funds. This is a refocusing that should have happened years ago. In fact, I’ve never understood BMW’s Mini Cooper adopting a Peugeot engine — one factor that has frankly led me to avid the car. A Honda V-Tec engine would have truly made more sense. But I digress.