PSA Group's chief tells Opel, Vauxhall: 'We're here to help'

GENEVA (AP) " The top executive of France's PSA Group had a message Tuesday for the two European companies it's buying from General Motors: "We're here to help." Any job cuts down the road, he says, would only stem from overall changes in the auto industry, not any preconceived plans.

Carlos Tavares, CEO of the automaker behind Peugeot and Citroen, told The Associated Press in an interview that PSA could actually seek to take GM's brands Opel and Vauxhall global after the closing of the planned 2.2 billion euro ($2.33 billion) deal " a step the Detroit giant didn't take.

On the sidelines of the Geneva auto show, Tavares said PSA hopes to leverage its own experience as a once-troubled automaker: It needed a bailout from the French state and Chinese investors in the wake of the financial crisis.

"The position we are taking here is: We are here to help. We think we can help because we were in the same position four years ago. We were also in a difficult financial position, and we were able to turn around our company," he said.

"We believe that, with humility but some confidence, we can help Opel and Vauxhall turn around."

Tavares noted the size of the challenge: Opel-Vauxhall, he said, "has been making red ink for 10 years, and burning 1 billion euros of cash every year. I think we need all to realize that there is a problem."

In their announcement Monday, GM and PSA said they expect annual savings of 1.7 billion euros by 2026. Amid uncertainty over Britain's exit from the European Union, Britain's Vauxhall " and its 4,500 jobs " appears most vulnerable to any future cuts.

Tavares said Brexit was "completely marginal" in PSA's decision to strike the deal.

While PSA could "leverage" whichever way Britain chooses to leave the bloc, Tavares all but cast his vote against a "hard Brexit" " in which Britain would leave without retaining some form of privileged access to the EU's tariff-less single market.

"If it is a hard Brexit, it would be better to source from inside, than from outside. In that case, then, the manufacturing footprint that Opel and Vauxhall have in the UK is a strategic opportunity," he said. "If it's not a hard Brexit, then everybody will be happy and the markets will be better, and everybody will enjoy it."

Taveres said PSA wants to create a "European champion" that could sell Opel and Vauxhall vehicles outside the continent, something GM hasn't done.

"That's where things are exciting: If we improve our cost competitiveness in the manufacturing, in purchasing, in engineering ... then we can sell more Opels and more Vauxhalls overseas, and it represents more work for the European plants," he said.

Opel CEO Karl-Thomas Neumann said "the industrial logic is obvious" from a PSA tie-up with the German automaker and its British sister company.

"We will benefit from size, from the joint development and manufacturing of cars, and from two very strong engineering teams joining their forces," Neumann told a news conference attended by Tavares " potentially his new boss.

"Together with Carlos, we are doing everything we can do to shape a sustainable and even brighter future for Opel, and for Vauxhall, and for PSA," Neumann said.

This story has been automatically published from the Associated Press wire which uses US spellings

Get the news delivered straight to your inbox

Receive the day’s news, sport and entertainment in our daily email newsletter

SIGN UP NOW

© Copyright 2017, NZME. Publishing Limited

Assembled by: (static) on production bpcf05 at 28 Apr 2017 17:38:53 Processing Time: 581ms