GM says it will keep Opel after report of Marchionne’s interest

October 6, 2012
GM says it will keep Opel after report of Marchionne’s interest
General Motors Co. intends to keep its Opel unit, Vice Chairman Steve Girsky said, after the Italian newspaper Il Sole 24 Ore reported that Fiat SpA is interested in buying the division.

“Opel is not for sale,” Girsky, who is head of the U.S. company’s European operations, said in an emailed statement Friday. “GM fully stands behind Opel. Opel is a fully integrated part of GM’s global footprint and vital for GM’s future success in Europe.”

Fiat Chief Executive Officer Sergio Marchionne has a plan to buy Ruesselsheim, Germany-based Opel at a “symbolic price” should an alliance between Detroit-based GM and PSA Peugeot Citroen falter, the Italian newspaper reported Friday, without citing anyone. Fiat, which has its headquarters in Turin, Italy, declined to comment on the report.

GM has been trying to fix its European business for more than a decade after losing $16.8 billion in the region since 1999. Opel is cutting workdays and may close a plant in Germany in 2016 as the debt crisis in Europe curtails growth and curbs demand for cars.

Part of GM’s strategy in the region is a partnership announced with Paris-based Peugeot in February. The companies missed deadlines for logistics and purchasing agreements, and people familiar with the matter said last month that talks on product development and supplies of vehicles and powertrains have slowed amid the worsening economy.

Frederic Saint-Geours, Peugeot’s vice president for brands, told journalists at the Paris Motor Show a week ago that alliance projects will be achieved by the year’s end. They were to have been signed by the end of this month, GM said in a U.S. regulatory filing.

“The GM-Peugeot alliance is fully on track,” Girsky said Friday. Jean-Baptiste Mounier, a spokesman for Peugeot, declined to comment.

Fiat rose as much as 0.5 percent to 4.47 euros and was trading up 0.5 percent in Milan. Peugeot gained 0.3 percent to 6.15 euros in Paris. GM shares traded in Frankfurt rose 0.5 percent to $24.78.

The French and U.S. companies didn’t meet a June 30 deadline on a joint parts buying plan. The companies cited delays getting the approval of antitrust regulators, which Peugeot CEO Philippe Varin said at the Paris show should be achieved in November.

GM and Peugeot announced they had reached a logistics agreement on July 2, more than two months after the April 30 deadline set in their Feb. 29 master agreement filed with the U.S. Securities and Exchange Commission.

Peugeot is trying to make its automotive operations profitable and stem a cash burn at the business totaling $257 million a month. The French automaker is cutting 8,000 jobs and closing a plant on the outskirts of Paris.

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