General Motors Co. has entered a deal to move the biggest portion of its European logistics operations to a unit of PSA/Peugeot-Citroen, its alliance partner. In a joint statement last Monday, the two companies said that by next year, the transfer to PSA's Gefco unit will start. As a result, GM is able to focus on its core car business.
Vice Chairman Stephen Girsky said that this is the initial step in leveraging synergies from the wide-ranging alliance with PSA/Peugeot-Citroen. He added that this logistics deal will pave the way for GM to achieve efficiency improvements and cost savings.
The Gefco unit of PSA will manage the logistics for GM's European brands Opel and Vauxhall. It will also do the same for its global brands, Chevrolet and Cadillac, including in Russia. It would be tasked to supply the materials and parts that will be used in GM's manufacturing plants and parts distribution centers in Europe. It also has to handle the transport of vehicles from the plants to dealerships.
According to Opel CEO Karl-Friedrich Stracke, GM will make an announcement about the agreement sometime this month. They had been working on the deal since the alliance was first created.
In late February, GM and PSA said that they hoped the alliance would result to a minimum of $2 billion in annual savings shared equally between the two companies within approximately five years. They will share the tasks of joint purchasing and logistics. They will also jointly develop and produce vehicles and parts.