General Motors' Exit from Europe
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Case Code: BSTR520 Case Length: 15 Pages Period: 2013-2018 Pub Date: 2017 Teaching Note: Available |
Price: Rs.500 Organization: General Motors Industry: Automotive Countries: Europe Themes: Divestment Strategy, Corporate Portfolio Management, International Management, International Business |
Abstract Case Intro 1 Case Intro 2 Excerpts
Introduction
General Motors Company (GM) announced in the first half of March 2017 that its subsidiary General Motors Europe (GM Europe) was exiting Europe by selling its European business to French carmaker Groupe PSA (PSA). As per the deal, GM would get US$2.3 billion from PSA. GM said it would concentrate on more profitable markets and products and new technologies like electric cars and fuel cells after its exit from Europe. Analysts felt that GM’s decision to exit Europe would strengthen the company’s profitability and increase the returns to its shareholders. Europe accounted for 10% of GM’s global sales and 18% of its global workforce. The deal would make PSA Europe’s second largest automaker behind Volkswagen AG (Volkswagen). As part of the deal, PSA would take over GM’s Vauxhall and Opel brands, which together produced about US$1.8 billion in revenue in Europe in 2016. GM’s CEO Mary Barra (Barra) said in a statement, “For GM, this represents another major step in the ongoing work that is driving our improved performance and accelerating our momentum...
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