GM sells European car business, announces layoffs
General Motors has sold its unprofitable European car business to the French maker of Peugeot, marking the American company’s retreat from a major market and raising concerns of job cuts in the region.
With the $2.33 billion deal announced Monday, GM is giving up brands – Opel in Germany and Vauxhall in Britain – that have given it a foothold in the world’s third-largest auto market since the 1920s.
The brands, however, have lost $20 billion since last making a full-year profit in 1999.
For PSA Group, which makes Peugeot and Citroen cars, the acquisition will turn it into Europe’s No. 2 automaker after Volkswagen and caps a turnaround after it was bailed out just three years ago.
PSA will join with French bank BNP Paribas to run GM’s European financial business. PSA also will take over 12 manufacturing facilities that employ about 40,000 people, according to a joint statement by the companies.
Executives insisted no job cuts are currently foreseen, but analysts say they’re
inevitable over the long term.
GM will keep its manufacturing center in Turin, Italy. GM and PSA will continue to collaborate on electric car technologies and maintain current supply agreements on some Buick models.
Also on Monday, GM announced it is laying off 1,100 workers at its Lansing, Mich., assembly plant.
GM says it’s ending the third shift at the Lansing Delta Township plant because one of its products – the GMC Acadia SUV – is moving to Spring Hill, Tenn.
The Lansing plant will still have two shifts building the Buick Enclave and Chevrolet Traverse SUVs.
Lansing’s last day as a three-shift plant will be May 12.
GM announced last spring it would make the new Acadia in Tennessee. It has added a third shift and about 800 jobs to its plant in Spring Hill.
Earlier this year, GM cut the third shift at its Lordstown Assembly Complex where the Chevrolet Cruze is built.
The Lordstown shift was cut to align with the demand for the Cruze, a compact car.
The Lordstown plant will be on a three-week production shutdown in March to adjust its supply levels, company officials said.