FRANKFURT -- PSA Group completed its takeover of the Opel and Vauxhall brands from General Motors on Tuesday, installing new managers and helping PSA to become Europe's second-largest carmaker by vehicle sales.
"We are witnessing the birth of a true European champion today," PSA Chairman Carlos Tavares said in a statement. "We will assist Opel and Vauxhall's return to profitability and aim to set new industry benchmarks together."
Opel said it was planning a "much leaner" management structure which aims to unlock economies of scale and synergies in purchasing, manufacturing and research and development estimated at 1.7 billion euros ($2 billion).
The goal is to generate a positive operational free cash flow by 2020 as well as an operating margin of 2 percent by 2020 and 6 percent by 2026, Opel said in a separate statement.
The takeover opens a new chapter in Opel's history after 88 years with GM, Opel CEO Michael Lohscheller said in the statement. Opel will continue to make technology "Made in Germany" available to everyone, he said.
"The combination of our strengths will enable us to turn Opel and Vauxhall into a profitable and self-funded business. We have set ourselves the clear target of returning to profitability by 2020," Loscheller said.
Click above right for a sound file of Opel CEO Michael Lohscheller's statement following finalization of the GM/PSA deal.
Opel announced a new management team, installing PSA executives Remi Girardon as head of manufacturing in place of Philip Kienle and Philippe de Rovira as Opel's new chief financial officer to fill the post left vacant when Lohscheller was promoted to Opel CEO.
Opel executive Christian Mueller becomes head of engineering tasked with integrating engineering and powertrain in one department. Mueller previously was head of global propulsion systems. He replaces William Bertagni, who will lead GM's engineering operations in China, Automotive News China reported..
Michelle Wen replaces Katherine Worthen as head of purchasing and supply chain. Wen moves to Opel from Vodafone Procurement.
Kienle, Worthen and Bertagni were all Detroit transplants in roles globally relevant for GM and had been expected to leave Opel. An Opel spokesman confirmed that the three executives are returning to GM.
Opel's marketing chief, Tina Mueller, remains in post while former CEO Karl-Thomas Neumann is no longer part of the leadership team, the spokesman said. Neumann restored Opel's image and reputation after taking the helm in March 2013 but resigned as CEO in June. He said on Twitter at the time that he would stay as member of Opel's management board until the closing of the acquisition by PSA. The German press has speculated that Neumann may return to Volkswagen Group, his former employer, to run either its China operations or the Audi luxury brand.
PSA said it was in talks to buy Opel in February and announced a deal valuing the business at 2.2 billion euros in March. For GM the sale of Opel marks a steady retreat from Europe, a region where it has not been profitable since 1999. Since taking over as GM's CEO in January 2014, Mary Barra has signed off on decisions to quit markets, including Russia and Indonesia, where GM lost money, and to pull the Chevrolet brand out of Europe
Economies of scale
For PSA the purchase increases economies of scale in Europe. PSA and GM have tried before to combine their small cars - the failed centerpiece of a "global strategic alliance" unveiled in 2012, which was rapidly scaled back to three shared projects from 40 initially considered.
Opel's first model shared with PSA, the Crossland X subcompact crossover, has been available at dealerships since the end of June. The Grandland X compact crossover follows in the autumn. The successor of the Opel Combo light commercial vehicle will come to the market next year and in 2019 the next generation of the Corsa subcompact will be launched with PSA technology.
PSA and Opel will continue to work with GM electric propulsion development. Opel plants will continue to produce vehicles for the GM brands Buick and Holden.
PSA's acquisition of GM Financial's European operations is under way, subject to validation by regulatory authorities.
Christiaan Hetzner contributed to this report