PSA and GM to confirm sale of Opel

General Motors and France’s PSA group is set to hold a joint press conference in Paris tonight, where it is expected the sale of Opel to PSA will be confirmed. Reuters reported the deal had won PSA board approval, which includes the French government, the Peugeot family, and Chinese car maker Dongfeng, on Saturday. Negotiations had been hampered over a $14.2 billion pension deficit in the Opel company, and demands by GM that a PSA-owned Opel be barred from competing against GM’s own Chevrolet line-up in certain markets. However, sources told Reuters on Thursday the non-compete issues and pension deficit had been resolved, with GM agreeing to boost its funding injection into the pension plan. The acquisition of Opel will make PSA, which currently manufactures Peugeot, Citroen and DS cars, the second-largest car maker in Europe after Volkswagen. Both PSA and GM confirmed talks were underway last month over the sale of Opel and the British Vauxhall brand, which sparked discussion and concern over possible job cuts and factory closures. Opel and Vauxhall currently employ 38,000 people in the UK and Germany. PSA said it would honour existing manufacturing contracts that run through to 2020. The acquisition of Opel comes after GM reported a 16th consecutive loss for its European manufacturing arm. According to Reuters, PSA CEO Carlos Tavares also told his board that PSA would redevelop the Opel line-up with its own technologies to achieve rapid savings for the brand. PSA avoided bankruptcy in 2014 by selling 14 per cent stakes of the company to the French government and Dongfeng.