FILE PHOTO: Carlos Tavares (C), Chairman of the Managing Board of French carmaker PSA Group, Mary Barra (L), chairwoman and CEO of General Motors, and Dr Karl-Thomas Neumann, Chairman of the Management Board Opel Group GmbH, pose during a news conference
FRANKFURT - 1 August 2017: PSA Group completed its takeover of the Opel and Vauxhall brands from General Motors on Tuesday, installing new managers and helping the French carmaker to become Europe's second-largest carmaker by sales.
General Motors is selling off its loss-making European operations to Peugeot, which has a better track record of making small cars profitable in Europe.
“We are witnessing the birth of a true European champion today,” PSA Chairman Carlos Tavares said in a statement. “We will assist Opel and Vauxhall’s return to profitability and aim to set new industry benchmarks together."
Opel announced a new management team, installing PSA executives Remi Girardon as Vice President Manufacturing and Philippe de Rovira as Opel's new Chief Financial Officer.
Opel said it was planning a "much leaner" management structure which aims to unlock economies of scale and synergies in purchasing, manufacturing and research and development estimated at 1.7 billion euros ($2 billion).
The goal is to generate a positive operational free cash flow by 2020 as well as an operating margin of 2 percent by 2020 and 6 percent by 2026, Opel said in a statement.
For General Motors the sale of Opel marks a steady retreat from Europe, a region where it has not been profitable since 1999.
Since taking over as GM's CEO in January 2014, Mary Barra has signed off on decisions to quit markets, including Russia and Indonesia, where GM lost money, and to pull the Chevrolet brand out of Europe.
PSA admitted it was in talks to buy Opel in February, and announced a deal valuing the business at 2.2 billion euros in March.
For PSA the purchase increases economies of scale in Europe. PSA and GM have tried before to combine their small cars - the failed centerpiece of a "global strategic alliance" unveiled in 2012, which was rapidly scaled back to three shared projects from 40 initially considered.