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TEXT-Fitch on GM, PSA alliance
2012年2月29日 / 晚上10点29分 / 6 年前

TEXT-Fitch on GM, PSA alliance

Feb 29 - Today's announcement by General Motors Co. (GM) that
it plans to enter into a long-term alliance with PSA Peugeot Citroen 
(PSA) has no effect on GM's ratings. As part of the alliance agreement, GM has
agreed to make an equity investment in PSA that will give GM a 7% stake in the
French automaker. Although specifics have not been reported, Fitch Ratings
estimates that GM's investment will be in the $350 million-$400 million range.
We regard the investment in PSA as manageable in light of GM's solid liquidity
position, including $32 billion of cash and marketable securities on the balance
sheet at year-end 2011.	
	
While expanded cooperation with PSA could eventually help drive cash flow
improvements for GM's loss-making Opel division in Europe, the proposed alliance
offers no help with respect to the fundamental problem of overcapacity in the
European auto market. However, both companies will continue to work on their
individual cost savings and rationalization plans.	
	
Although the GM-PSA alliance is more comprehensive than many, we note that
alliances in the global auto industry are relatively common. GM's 'BB' issuer
default rating (IDR) captures our expectation that the automaker will continue
to make periodic investments in ventures of the type disclosed today, and GM
noted that today's announcement does not affect its other global ventures. In
addition, relative to the company's cash position and annual FCF generation, the
PSA equity investment is relatively small. However, we note that the track
record of recent global auto alliances has been mixed, and the GM-PSA
partnership will not achieve its most significant financial synergies for
several years, limiting the near-term benefit on GM's financial performance.	
	
In connection with the alliance agreement, PSA has entered into a EUR1 billion
rights offering that will bolster the French automaker's liquidity position at a
time when auto sales in Europe remain under heavy pressure, with no signs of
progress toward addressing the European industry's lingering overcapacity
problem. GM's investment in PSA is being made pursuant to this agreement.	
	
The GM-PSA alliance will involve cooperation in two distinct areas, including
platform and technology sharing, and global purchasing, with estimated
steady-state annualized benefits of $2 billion. The companies estimate that the
benefits will be shared about equally between the two, but have noted that full
benefits will likely not be realized until five years out. As part of the
purchasing portion of the alliance, GM plans to enter into a commercial
cooperation agreement with PSA's Gefco subsidiary, which will provide logistics
savings in certain regions. No cadence on the roll-out of synergies has been
reported, but the most significant savings are likely to be achieved only after
the companies begin sharing platforms, with the first alliance product planned
for launch in 2016.	
	
The above article originally appeared as a post on the Fitch Wire credit market
commentary page. The original article can be accessed at www.fitchratings.com.
All opinions expressed are those of Fitch Ratings.

我们的标准:汤森路透“信任原则”
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