Uproar in Ghana after president unveils his own statue    Putin hails 'courageous' Trump after election win    Israel passes law to deport relatives of attackers, including citizens    Monkey mayhem in South Carolina after 43 primates escape research facility    Russian anti-war teenager faces five years in jail after failed appeal    SR 3.95 million fines for 3 employees of a company and 6-month jail for one for violating Capital Market Law    Qassim emir launches 52 health projects costing a total of SR456 million    BD and INS partner to elevate standards of infusion care in MENAT    Dubai Design Week launches its 10th edition, celebrating creativity and innovation    GASTAT: Passengers of public transport bus and train soar 176% and 33% respectively in 2023    Fakeeh Care Group reports 9M-2024 net profit of SR195.3 million, up 49% y-o-y driven by solid revenue growth and robust profitability    HRT does not impact life expectancy — UK health body    Liam Payne's body to be flown back to the UK    Suspect arrested for banking fraud totaling SR493 million as Nazaha pursues corruption charges    Arab leaders and heads of state congratulate US President-elect Donald Trump    Neymar suffers muscle tear, out for 4-6 weeks    Crown Prince hails Saudi medical team that performed world's first fully robotic heart transplant    Al Nassr secures 5-1 victory over Al Ain to edge closer to knockout stage    Al Ahli extends perfect start with 5-1 victory over Al Shorta    Mitrovic's hat-trick leads Al Hilal to 3-0 victory over Esteghlal    India puts blockbuster Pakistani film on hold    The Vikings and the Islamic world    Filipino pilgrim's incredible evolution from an enemy of Islam to its staunch advocate    Muted Eid celebrations for millions of Nigerian Muslims    Exotic Taif Roses Simulation Performed at Taif Rose Festival    Asian shares mixed Tuesday    Weather Forecast for Tuesday    Saudi Tourism Authority Participates in Arabian Travel Market Exhibition in Dubai    Minister of Industry Announces 50 Investment Opportunities Worth over SAR 96 Billion in Machinery, Equipment Sector    HRH Crown Prince Offers Condolences to Crown Prince of Kuwait on Death of Sheikh Fawaz Salman Abdullah Al-Ali Al-Malek Al-Sabah    HRH Crown Prince Congratulates Santiago Peña on Winning Presidential Election in Paraguay    SDAIA Launches 1st Phase of 'Elevate Program' to Train 1,000 Women on Data, AI    41 Saudi Citizens and 171 Others from Brotherly and Friendly Countries Arrive in Saudi Arabia from Sudan    Saudi Arabia Hosts 1st Meeting of Arab Authorities Controlling Medicines    General Directorate of Narcotics Control Foils Attempt to Smuggle over 5 Million Amphetamine Pills    NAVI Javelins Crowned as Champions of Women's Counter-Strike: Global Offensive (CS:GO) Competitions    Saudi Karate Team Wins Four Medals in World Youth League Championship    Third Edition of FIFA Forward Program Kicks off in Riyadh    Evacuated from Sudan, 187 Nationals from Several Countries Arrive in Jeddah    SPA Documents Thajjud Prayer at Prophet's Mosque in Madinah    SFDA Recommends to Test Blood Sugar at Home Two or Three Hours after Meals    SFDA Offers Various Recommendations for Safe Food Frying    SFDA Provides Five Tips for Using Home Blood Pressure Monitor    SFDA: Instant Soup Contains Large Amounts of Salt    Mawani: New shipping service to connect Jubail Commercial Port to 11 global ports    Custodian of the Two Holy Mosques Delivers Speech to Pilgrims, Citizens, Residents and Muslims around the World    Sheikh Al-Issa in Arafah's Sermon: Allaah Blessed You by Making It Easy for You to Carry out This Obligation. Thus, Ensure Following the Guidance of Your Prophet    Custodian of the Two Holy Mosques addresses citizens and all Muslims on the occasion of the Holy month of Ramadan    







Thank you for reporting!
This image will be automatically disabled when it gets reported by several people.



PSA targets Opel turnaround as GM exits Europe
Published in Alriyadh on 07 - 03 - 2017

France's PSA Group has agreed to buy Opel from General Motors in a deal valuing the business at 2.2 billion euros , creating a new European car giant to challenge market leader Volkswagen.
The maker of Peugeot and Citroen cars vowed to return Opel and its British Vauxhall brand to profit, targeting an operating margin of 2 percent within three years and 6 percent by 2026 underpinned by 1.7 billion euros in joint cost savings.
PSA shares jumped as much as 5.2 percent after Chief Executive Carlos Tavares said GM's European arm could be turned around using lessons from the French group's own recovery. Opel recently recorded its 16th consecutive full-year loss.
Investors bet Trump-fueled tech rally far from over
"We're confident that the Opel-Vauxhall turnaround will significantly accelerate with our support," he said.
By acquiring Opel, PSA leapfrogs French rival Renault (RENA.PA) to become Europe's second-ranked carmaker by sales, with a 16 percent market share to VW's 24 percent.
The disposal seals GM's exit from Europe and ends a relationship dating back to the 1920s.
Eight years after coming close to a sale to Canada's Magna (MG.TO), the Detroit car giant has faced renewed investor pressure to offload the business to raise profitability, rather than chase the global sales crown currently held by VW.
Last year, PSA and GM Europe recorded a combined 72 billion euros in revenue and 4.3 million vehicle deliveries.
GM will receive 1.32 billion euros for the Opel manufacturing business in the form of 650 million euros in cash and 670 million in PSA share warrants.
An additional 900 million euros will be paid by the Paris-based carmaker and BNP Paribas (BNPP.PA) for Opel's financing arm, to be operated jointly and consolidated by the French bank.
After fending off 2015 merger overtures by Fiat Chrysler (FCHA.MI) with support from her board, GM boss Mary Barra agreed to target a 20 percent return on invested capital and pay out more cash to shareholders.
"The way I look at this is positioning Opel-Vauxhall to be incredibly successful in the future," Barra said on Monday when asked by a reporter whether she was relieved.
"General Motors doesn't have to be relieved," PSA's Tavares interjected. "They can be proud of giving Opel-Vauxhall a better future."
PSA shares were up 2.2 percent at 19.49 euros as of 0939 GMT, after reaching 20.06 euros earlier in the session. GM shares closed 1.2 percent higher on Friday after Reuters reported a deal had been struck.
The two carmakers, which already share some production in an existing European alliance, confirmed last month they were negotiating PSA's outright acquisition of Opel, sparking concern over possible job cuts.
In day of pro-Trump rallies, California march turns violent
Trump to leave Iraq off new travel ban order: White House source
Tavares said on Monday the targeted savings would come from purchasing and research and development - avoiding plant closures - as the Opel lineup is redeveloped with PSA technology and vehicle architectures.
An ambitious technical convergence push will begin with the Opel Corsa, the CEO indicated, as earlier reported by Reuters.
The next version of the popular subcompact will be delayed by a year to 2020 as it goes back to the drawing board, according to presentation slides shown to analysts.
"Our planning teams are already working on that," Tavares said when questioned about the model. Another five PSA-based Opel vehicles will follow by 2023.
The Opel deal caps a stellar two-year recovery for PSA, which avoided bankruptcy in 2014 by selling 14 percent stakes to the French state and China's Dongfeng (0489.HK), matching the Peugeot family's diluted holding.
Tavares has since cut about 3,000 French assembly line jobs each year through voluntary departures to trim the wage bill to 11 percent of revenue from the 15 percent level he inherited - which is roughly where Opel's labor costs stand today.
PSA reiterated pledges to run Opel as a distinct German subsidiary and honor existing job guarantees, which tend to cover production plans for existing models.
Beyond those horizons, however, the outlook for Opel plants may be less certain.
"Tavares wants to create healthy competition between the plants," said one person involved in the tie-up talks. "They will be competing for workload."
With Europe's auto market near a peak, some analysts expect the new group to close two or three plants within five years. Britain's European Union exit adds to the uncertainty over Vauxhall's UK plants at Ellesmere Port and Luton.
But Tavares said exports could help fill Opel plants, adding that UK manufacturing brought opportunities as well as risks in.


Clic here to read the story from its source.