Despite a change in ownership from General Motors to PSA Group, Opel’s new owners are still expecting a loss in 2017. The news came from PSA CEO Carlos Tavares during an address to PSA shareholders earlier on Wednesday, when he cautioned more losses for the company’s new German subsidiary.
At PSA’s annual meeting in Paris, the executive discussed that former owner GM had made some good moves with Opel, but followed that up with a big line of caution and honesty.
“But we must recognize that the losses are real and probably will be again in 2017,” stated Tavares as reported by Reuters.
PSA acquired Adam Opel AG from GM back in March as part of a deal valued at $2.4 billion. As part of the deal, PSA will issue warrants to GM that the company can convert to stock as early as five years from the date of the transaction. PSA shareholders overwhelming approved the warrants, firming up the Opel acquisition. The warrants are currently valued at about 670 million euro and are intended to insure GM’s cooperation with PSA in the coming years.
Part of the cooperation between PSA and GM after the acquisition will include Opel continuing to produce some GM products under a procurement contract. The 2018 Buick Regal and Holden Commodore will both be produced by Opel and PSA.