GM and PSA seem to be in disagreement over several alliance issues

Article by Christian A., on March 13, 2012

General Motors and PSA Peugeot Citroen appear to be seeing their new alliance in different angles based on the comments that the companies made last week. On one side, it is clear that GM is searching mainly for aid in Europe. It is generally interested in turning the money-losing Opel around. On the other hand, PSA sees the alliance clearly as a global partnership, basking on the influence of the more than 9 million units a year from GM. In short, PSA is seeking a way to boost sales sharply outside the European region just like what any Europe-based automakers will hope for as they battle high costs.

Starting a partnership when the parties are not on the same goal could pose a problem. For one, GM has a history of alliances that did not work out. However, it may be no more than early-days misunderstanding in the midst of the commotion of a car show. Besides, GM CEO Dan Akerson has previously said that the partnership is "a global alliance that's emerging." 

However in recent talks, executives from GM highlighted the benefits for the automaker's loss-making German unit -- Adam Opel AG. They disclosed that the partnership's joint platform development as well as purchasing could help bring Opel out of the red, they said. A top official at GM disclosed that the joint purchasing will be "a big lever, specifically in Europe."

On the other hand, PSA Chairman Philippe Varin revealed a broader view at a press event. When asked whether the partnership was with GM or with Opel, he emphasized that it is an "alliance between PSA and GM -- global." He further stated that this complements a PSA target to have two-thirds of its sales outside the European region by 2020.

This year, 42% of sales were outside the European region, an increase from 39% in 2010. Varin highlighted that together, the two automakers have a purchasing expenditure of $125 billion each year. From this amount, they hope to save $2 billion yearly within five years. Varin disclosed that the organization for purchasing will be global. He further explained that there will be a joint venture that will have "a group of lead buyers globally on the world business."

Topics: gm, psa, partnership

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