The Lemon Fool

Can anybody explain the business case behind (AIUI) loss making Peugeot-Citroen for loss making Vauxhall-Opel?

Nimrod103 wrote:Can anybody explain the business case behind (AIUI) loss making Peugeot-Citroen for loss making Vauxhall-Opel?

For all the valuable goodwill and brand of Vauxhall-Opel. You know, like the Corsa, and, ummmmm, the Astra? And maybe get a bit of the "I'll never buy a French car" market off people that forget that it's owned by PSA.

FredBloggs wrote:Simple. Within five years all the UK jobs will be exported to France and UK factories closed. Sad to say, the French have a long history of doing this to UK and other countries jobs. If I was working for Vauxhall, my job search would have started today. Very sad.

You think then, that Peugeot is not a rational company, and won't want to benefit from cheap pound production costs?

Nimrod103 wrote:

FredBloggs wrote:Simple. Within five years all the UK jobs will be exported to France and UK factories closed. Sad to say, the French have a long history of doing this to UK and other countries jobs. If I was working for Vauxhall, my job search would have started today. Very sad.

You think then, that Peugeot is not a rational company, and won't want to benefit from cheap pound production costs?

It was explained last night in Newsnight that Vauxhall import about 75% of components that go to make their cars in the UK so the fall in the pound has a much lower impact than might be imagined and any tariffs would provide a double whammy against UK production (which is more like just assembly). On the other hand it was suggested that for strategic reasons it might be wise for PSA to have some sort of facility outside of the EU/EZ.

John

redsturgeon wrote:

Nimrod103 wrote:

FredBloggs wrote:Simple. Within five years all the UK jobs will be exported to France and UK factories closed. Sad to say, the French have a long history of doing this to UK and other countries jobs. If I was working for Vauxhall, my job search would have started today. Very sad.

You think then, that Peugeot is not a rational company, and won't want to benefit from cheap pound production costs?

It was explained last night in Newsnight that Vauxhall import about 75% of components that go to make their cars in the UK so the fall in the pound has a much lower impact than might be imagined and any tariffs would provide a double whammy against UK production (which is more like just assembly). On the other hand it was suggested that for strategic reasons it might be wise for PSA to have some sort of facility outside of the EU/EZ.

John

This article from 2014 says Vauxhall source 60% from non-local suppliers (https://www.ft.com/content/ba2205f4-f87 ... 144feabdc0). And I had not realized GM and Peugeot have a global alliance going back to 2012 to share vehicle platforms, components and modules, jointly source commodities, components and other goods and services from suppliers (http://www.vauxhall.co.uk/about-vauxhal ... iance.html). I am sure one commentator said that Opel was more of a basket case than Vauxhall, so maybe the new economic situation will favour Vauxhall.

Nimrod103 wrote:

redsturgeon wrote:

Nimrod103 wrote:
You think then, that Peugeot is not a rational company, and won't want to benefit from cheap pound production costs?

It was explained last night in Newsnight that Vauxhall import about 75% of components that go to make their cars in the UK so the fall in the pound has a much lower impact than might be imagined and any tariffs would provide a double whammy against UK production (which is more like just assembly). On the other hand it was suggested that for strategic reasons it might be wise for PSA to have some sort of facility outside of the EU/EZ.

John

This article from 2014 says Vauxhall source 60% from non-local suppliers (https://www.ft.com/content/ba2205f4-f87 ... 144feabdc0). And I had not realized GM and Peugeot have a global alliance going back to 2012 to share vehicle platforms, components and modules, jointly source commodities, components and other goods and services from suppliers (http://www.vauxhall.co.uk/about-vauxhal ... iance.html). I am sure one commentator said that Opel was more of a basket case than Vauxhall, so maybe the new economic situation will favour Vauxhall.

One more factor to bear in mind is that redundancies are much cheap to effect in the UK than in Germany.

John

redsturgeon wrote:

Nimrod103 wrote:

redsturgeon wrote:
It was explained last night in Newsnight that Vauxhall import about 75% of components that go to make their cars in the UK so the fall in the pound has a much lower impact than might be imagined and any tariffs would provide a double whammy against UK production (which is more like just assembly). On the other hand it was suggested that for strategic reasons it might be wise for PSA to have some sort of facility outside of the EU/EZ.

John

This article from 2014 says Vauxhall source 60% from non-local suppliers (https://www.ft.com/content/ba2205f4-f87 ... 144feabdc0). And I had not realized GM and Peugeot have a global alliance going back to 2012 to share vehicle platforms, components and modules, jointly source commodities, components and other goods and services from suppliers (http://www.vauxhall.co.uk/about-vauxhal ... iance.html). I am sure one commentator said that Opel was more of a basket case than Vauxhall, so maybe the new economic situation will favour Vauxhall.

One more factor to bear in mind is that redundancies are much cheap to effect in the UK than in Germany.

John

So a suitable advert for German industry is 'Invest in Germany, but if business conditions change, and you want to downsize, we will make you regret it". I can't see that campaign title being very successful.
But thereagain Germany has grown so rich from the EU and the Euro, they don't need foreign investment.

Yes, I was quite amused to see a Vauxhall union rep proudly boasting about the "productivity" of his members. Presumably this calculation is based on man-hours, and not wages. Romanian workers can afford to be only 1/6 as productive as uk workers, and still build stuff cheaper.

And of course, the French govt is a 14% stakeholder in PSA. So the closure of any French plants, regardless of productivity, seems unlikely.

Gryff