In a move that could shake up the global auto industry, General Motors and French automaker PSA Group have said they are in talks that could result in PSA buying GM's European auto operations. But, as Ivor Bennett reports, any deal would have to overcome financial, industrial and political obstacles.
Just another day at the office, this was not. News of a possible takeover by Peugeot, had some at Opel's headquarters fearing for their jobs. (SOUNDBITE) (German) OPEL EMPLOYEE, PAUL FROEHLICH, SAYING: "I guess this is not good news for us. That's what I think." But good perhaps for Opel's parent General Motors. It's consistently struggled to make a profit with the brand. And last year warned it wouldn't be back in the black until 2018. (SOUNDBITE) (German) FOUNDER AND DIRECTOR, CENTRE OF AUTOMOTIVE MANAGEMENT (CAM), STEFAN BRATZEL, SAYING: "In the short term, this is definitely a surprise. In the long term, GM was very unhappy with Opel's clean up efforts. They have been operating in the red since 1999 which by now amounts to billions." But there are also questions over who was in the driving seat for the decision. (SOUNDBITE) (German) FOUNDER AND DIRECTOR, CENTRE OF AUTOMOTIVE MANAGEMENT (CAM), STEFAN BRATZEL, SAYING: "It is possible that Trump exerted some influence on GM. There is a new wave of protectionism with Trump and this could be one reason why GM is concentrating on the domestic market and focusing on big growth markets such as China." The deal will give Peugeot a 16.3 percent market share Helping it leapfrog Renault into second place behind Volkswagen. Shares in both companies rose more than 3 percent in early New York trading. But both have cautioned a deal is not certain. The first of several industrial and political hurdles are already being revealed. Germany's Economy Minister saying it was unacceptable talks took place without consulting local government.