Europe’s automakers in turmoil at Geneva auto show – Detroit Free Press
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?
PSA CEO Carlos Tavares isn’t the only dealmaker running a European automaker: Fiat Chrysler CEO Sergio Marchionne is still looking for partners. Everything Marchionne did over the last two years was geared to making Fiat Chrysler a more attractive partner or acquisition target.
It’s hard to believe the peripatetic Italian didn’t hop the first plane to Paris when he heard PSA might buy Opel/Vauxhall. FCA would appear to offer more to Peugeot, thanks to its North American sales network and ownership of appealing brands that don’t overlap with Peugeot or Citroën: Jeep, Ram, Alfa Romeo and Maserati.
Some European analysts suggest that once GM’s rid of Opel/Vauxhall, the American giant might go after Fiat Chrysler. GM executives dream of the money they could make with the Jeep and Ram brands, and acquiring Fiat would let it retain a presence in Europe at a lower cost than Opel’s perpetual losses.
However, GM would have to close FCA dealerships and factories in North America, a costly strategy that would draw rabid criticism from the “America First” chorus.
Where art thou, Wolfgang?
High-profile executive Wolfgang Bernhard’s surprising departure from Daimler this month set tongues wagging. The ambitious engineer has held top jobs at Chrysler when it was owned by Daimler, Mercedes-Benz and Volkswagen, burning bridges behind him at every stop.
Bernhard is nonetheless widely admired for his intellect and drive. He left Daimler — for the ever popular “personal reasons” — when it became clear he would not replace his longtime sponsor and ally Dieter Zetsche as CEO.
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, management feuds
VW’s management suite continues to look like the Red Wedding in “Game of Thrones.” There’s still no end in sight to the cost and legal ramifications of its diesel scandal. Meanwhile, former Chairman and CEO Ferdinand Piëch — also one of VW’s largest stockholders — has reportedly been talking to German authorities, undermining VW management’s claims that they were unaware of the fraud.
Piëch may be corporate Europe’s most accomplished knife-fighter: Challenge him and you don’t even realize you’re cut until you see your guts on the floor. It wouldn’t surprise anyone if he ended up back on the company’s board, or as kingmaker for a new set of bosses.
I hear that if you say Wolfgang Bernhard’s name three times, he magically appears in your executive suite. Let’s see who calls him first.
Management changes at Renault Nissan
Carlos Ghosn’s decision to step aside as Nissan CEO begins a changing of the guard atop the European auto industry.
Ghosn, Daimler’s Zetsche and Fiat Chrysler boss Sergio Marchionne are Titans of intellect and charisma, and all are likely to retire in the next two to four years.
They reshaped the companies they led, and in the cases of Ghosn and Marchionne, created new automaking giants.
Ghosn, 62, is second to none. He pulled Nissan from the brink of dissolution, made Renault relevant on the world stage, and saved several other brands from ruin. He remains chairman of Nissan — not to mention chairman and CEO of Renault, chairman of Mitsubishi and the brains behind brands including Russian Lada, Romania’s Dacia and Korean Samsung.
Ghosn has not announced retirement plans, but as he takes a step back at Nissan, speculation will inevitably begin.
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.
Contact Mark Phelan: 313-222-6731 or email@example.com. Follow him on Twitter @mark_phelan.