Tuesday, February 21, the French automaker PSA Group and General Motors started negotiations about purchasing the German brand Opel. The deal could be worth $2 billion. In addition, the French plan to buy Proton, Malaysia's largest automaker. However, the deal between PSA and GM could trigger serious economic and political consequences, such as massive layoffs.
Signing of agreement between the major auto companies is scheduled for March 2. According to Bloomberg, $1 billion will be paid in cash, and the second part of the sum should cover liabilities of Opel. However, there is no guarantee that the companies will come to agreement, according to sources familiar with the negotiations.
It should be noted that the deal could be beneficial for both sides: General Motors will sell loss-making Opel, and PSA will be able to increase its market share in Europe to 16% and take the second place in the European market.
However, the authorities in Germany and the UK are worried about a possible negative influence of this transaction. It could trigger liquidation of the Opel's plants in these countries. It is also possible that the leadership of the newly merged company may move production to France.
About 15 thousand people are employed at Opel plants in Germany, so the reduction of production can cause large-scale layoffs. The Ministry of Labour of Germany said that they negotiate with General Motors and PSA to maintain Opel plants in the country after the management change.
Because of widespread concern, PSA claims that the sharp collapse of production and job cuts are not expected until the end of 2018. According to the original agreement, Opel will be independent even after the change of ownership.
In addition to negotiating the purchase of Opel, representatives of the PSA Group are interested in acquiring a leading Malaysian automaker Proton. It specializes in the production of sports cars under the Lotus brand. The French company intends to modernize the Proton factory in Malaysia and build another production facility for cars exports to Southeast Asia.
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