Siegfried Wolf said General Motors Co.'s cost-cutting agreement with PSA/Peugeot-Citroen reflects that the US carmaker made the wrong decision when it withdrew from a deal to sell European operations to his company Magna International Inc. Wolf, Magna’s co-chief executive who led the failed acquisition of GM’s Opel/Vauxhall division, said US automaker has failed to give the brand the liberty to innovate, which is an important element that carmaker should have if they want to be successful in costlier countries.
"I think still that it wasn't the right decision on GM's part," said Wolf, who now chairs GAZ Group, adding it would have been better for both companies if only GM had sold Opel/Vauxhall.
Wolf further said that Opel and Vauxhall would have benefitted from more autonomy and an injection of pride, noting that the division is struggling because they were not given their own identity. He remarked that Opel and Vauxhall are still too dependent on GM, adding that the units need to be given freedom to do more and show some ingenuity as they thrive in high-cost countries.
Magna’s bid to acquire Opel/Vauxhall, backed by Sberbank, collapsed after a deal with GM was cancelled as the US carmaker gained a new board when it entered bankruptcy protection. Despite his tirades, Wolf currently has connections to GM, as his current company, GAZ, signed a deal in 2011 to produce 30,000 Chevrolet Aveo sedans and hatchbacks annually for the US carmaker at its Nizhny Novgorod plant.
On the other hand, GM and PSA will produce small and mid-size cars together, under an alliance agreement announced on Feb. 29. France's FO Metaux union is convinced that the future situation will only heighten rivalries between plants. GM has already implemented almost 6,000 job cuts at Opel, and may be planning to slash more at its older car production plants in Germany and the U.K. following the deal. [source: Bloomberg]