And so, the deal has been finalised. Opel (and Vauxhall) is off to France.And in one foul swoop Peugeot and Citroen, collectively known as PSA, becomes Europe’s second biggest car maker behind Volkswagen.
Is this good or bad news for the UK arm? What effect has Brexit had, and what about the future?
It seems that one of the factors that led to the deal was the 257 million euro loss made by Opel in 2016, and GM put a lot of this loss down to Brexit.
In the sense that the loss was partly a reason for the sale, and that Brexit was partly a reason for the loss, you could say that Brexit was part of part of the reason for the sale.
But then you might ask, so what?
PSA saw a massive jump in profits in 2016, with net income rising 92 per cent to 1.73 billion euros. The company, which is 14 per cent owned by the French government, has seen something of a turnaround.
What does this mean for the jobs for workers at Luton and Ellesmere Port? What does this mean for the future of Opel/Vauxhall?
Actually, there is a view that under the new ownership cars from the company might do rather well – that GM held the brand back – especially from emerging markets, in particular China.
It was a similar story with the likes of Jaguar and Aston Martin, which saw a new lease of life when they were sold by Ford.
It seems that there are two opposing forces at play. Frankly, in this Brexit era, the prospects for Vauxhall’s two factories in the UK, now that they are owned by a firm that has such strong roots in France, have deteriorated – maybe not straight away, but forward wind the clock five years or so from now, and there is a lot of uncertainty concerning the company’s position in the UK.
On the other hand, if, under the ownership of PSA, the Opel or Vauxhall brands can head for China this will be a good thing.
But frankly, there has to be a chance that Opel will do well, but the UK arm will suffer. It is not hard to envisage that by the beginning of the next decade, sales of Opel cars will be accelerating across China, but that the UK factories will be no more.
There is an even wider issue, however.
Autonomous cars and electric cars are coming.
If we see some kind of convergence between the sharing economy and autonomous cars, then the disruption that will result within the car industry will be enormous.
Maybe this was a key rationale behind GM’s decision. Earlier this century, the company messed up – it began the century as the biggest car company in the world, but failed to spot changing trends. GM cars were big – like monsters of the highway – but more and more consumers wanted fuel efficient. And while the US government did all it could to stop the rise of Toyota and Volkswagen, with fines and penalties for wrongdoings which possible should have been just as applicable to US rivals, the Japanese and then the European company overtook GM in the league table measuring the world’s largest car companies.
GM failed that test, maybe it has learnt its lesson, and this time wants to prepare for the next wave of disruption – and maybe in such times, it is better to focus resources on ideas and concepts to ensure relevance in the era of autonomous cars.
As for PSA, it is of the moment. But, whether that moment will last into the era that is approaching depends entirely on what it does next.