The dust has settled on the auto industry's deal of the year, now the hard work starts for the people who will try to make PSA Group's purchase of Opel/Vauxhall from General Motors a success.
There will be shock waves at the France- and Germany-based companies and in the overall European automotive sector as PSA-Opel makes big changes. These include slimming down a regional production footprint that has risen to 15 vehicle assembly plants from nine through the deal; reducing a European workforce that has grown to 125,000 employees; shuffling executives to find the correct mix of French and German influence at Europe’s second-largest automaker after Volkswagen Group; and addressing the overlap between the Peugeot, Citroen and Opel/Vauxhall brands.
To achieve PSA's goal of returning Opel to profit with an operating margin of 2 percent within three years and 6 percent by 2026, industry experts predict that up to three PSA-Opel plants will close and 5,000 workers will be laid off. In addition, one of the combined group's four volume brands may eventually shut down, some analysts say. These moves are considered overdue adjustments in a saturated European market plagued with chronic production overcapacity. Europe's need for consolidation is one reason why many auto bosses like the deal.