Europe's automakers in turmoil at Geneva auto show
Detroit Free Press
Mark Phelan - Feb. 25, 2017
The European auto industry is in turmoil as it prepares for the Geneva auto show in March.
Automakers would rather be talking about sleek new vehicles and exciting technologies, but corporate drama will loom large.
Here’s an overview to help you recognize some of the players and their potential roles:
General Motors sells Opel/Vauxhall to Peugeot SA
This appears to be a done deal, and it will rock the European industry. After nearly a century GM will effectively stop doing business in Europe, and France’s Peugeot SA, which includes the Citroën brand, will become the continent’s second-biggest automaker.
PSA is a stronger and more advanced company than most Americans realize, but taking on Opel is a huge challenge. Many European observers think PSA’s business, product line and manufacturing footprint overlap too much with Opel.
Concerns about possible job cuts in Germany and Britain have made the deal politically explosive, prompting Peugeot Group chief Carlos Tavares to meet top politicians and union leaders to reassure them that jobs will be protected, at least initially.
Meanwhile, GM which fought tooth and nail to retain Opel’s engineering and design expertise during the Great Recession, is ready to move on. Management’s new credo of “fish where they’re biting” translates to abandoning Europe
’s high-cost, low-margin environment for more profitable locales, like North America and China. It’s risky, but GM no longer needs Opel’s engineering and design, so the die is cast.
Peugeot on the prowl around the world
Speaking of brands most Americans have never heard of, Peugeot is also reportedly shopping for Proton, a struggling Malaysian automaker. Reports say PSA thinks it can boost Proton production from 150,000 a year to as much as two million. Other automakers have tried to turn Proton into a success before, but Malaysia remains inexplicably attractive to automakers. China’s Geely, which owns Volvo, is also interested in Proton.
Proton also happens to own Lotus, the British sports car and consulting company that’s synonymous with engineering excellence and an inability to make money.
Any big move by Peugeot SA may start dominoes falling as other European automakers react.
Fiat Chrysler, anyone?...
Where art thou, Wolfgang?...
High-profile executive Wolfgang Bernhard’s surprising departure from Daimler this month set tongues wagging...
...If Bernhard wants another job in the auto industry, he should get offers from European, Chinese and possibly even Japanese, Korean or American automakers.
Volkswagen diesel(gate), management feuds...
Did I mention there will be cars?
Automakers hope to squeeze in a few new-vehicle unveilings in between management rumors and boardroom tussles during the Geneva auto show’s media days March 7-8.
The goodies coming include a $1.6-million supercar by Audi’s in-house ItalDesign studio, VW’s Arteon fastback sedan, Opel Grand Insignia station wagon, Mercedes-Benz E-class convertible and a crazed soft-top Mercedes-Maybach SUV that’s like a six-figure Jeep Wrangler.
I’ll preview those and other cars coming at the show Sunday, March 5.