GM Focused on Completing Peugeot Programs, Girsky Says
General Motors Co. (GM) Vice Chairman Steve Girsky reiterated that the automaker doesn’t plan to invest further in PSA Peugeot Citroen (UG) and called speculation about expanding ties between the automakers a distraction.
“All I want to do is get the programs, the current programs, to work,”Girsky said in an interview at Bloomberg News headquarters in New York. French newspapers reported yesterday that France has decided to hire a bank for advice about Peugeot. The move indicates a further alliance with GM or with Chinese automaker Dongfeng is being negotiated, Le Figaro said.
GM spent 320 million euros ($418 million) last year for its 7 percent stake in Paris-based Peugeot as part of an alliance that includes joint purchasing and vehicle development intended to improve results for both companies in Europe, where industrywide sales are shrinking for a sixth consecutive year.
Girsky, 51, is overseeing Detroit-based GM’s efforts to stem losses in Europe by mid-decade and rebuild the Opel brand. He put together the Peugeot deal and was the interim head of GM’s European operations until he hired former Volkswagen AG (VOW) executive Karl-Thomas Neumann to lead Opel.
Girsky yesterday referred to comments by Chief Executive Officer Dan Akerson last month in Shanghai that the automaker doesn’t intend to invest more money into Peugeot “at this time.”
“If we see something change we will re-evaluate that,” Akerson said. “It’s kind of steady as she goes.”
Girsky said yesterday the CEO “was pretty clear about that.”
Peugeot posted a loss of 5.01 billion euros last year, with an operating deficit of 576 million euros. The company’s sales declined 9.8 percent during 2013’s first half. GM wrote down its Peugeot investment by $220 million earlier this year.
“Peugeot is a very good company,” the GM executive said. “They know how to operate when capital is tight because that’s what they’ve done.”
GM rose 0.7 percent to $36.40 at the close yesterday in New York. The shares have gained 26 percent this year, compared with an 18 percent increase for the Standard & Poor’s 500 Index.
While GM has lost more than $18 billion in Europe since 1999, GM narrowed its first-quarter loss in the region, outpacing Ford and helping the company beat analysts’ earnings estimates.
GM is introducing new models in Europe, including the new Opel Adam subcompact car and Mokka sport-utility vehicle. The automaker also is reducing spending, including plans to cut $500 million in annual costs during the next three years. GM plans to shutter its Bochum assembly plant at the end of next year, which would mark the first automobile factory in Germany to close since World War II.
While Girsky said he sees positive signs for GM’s European business, he wasn’t upbeat about industry sales in the region.
“Things are starting to slowly stabilize but it’s market by market,” Girsky said. “Things are still terrible. I don’t want to leave anyone with the impression that things are going to get better any time soon there because that’s not what we’re planning on.”
He categorized Germany as a “little soft” and Russia as weakening while the U.K. is doing better and Italy and Spain are stabilizing at “low levels.”
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