It is early days for the purchasing and platform sharing agreement between GM and PSA, but work has already started to integrate the companies’ engineering and buying operations.
Where it will all lead to is a $2b a year saving — $1b a year each — in costs, which from the outside seems like a significant number. Steel, for example, is a pricey commodity that car companies buy in large quantities — PSA buys 2m tonnes a year and GM globally 6m – so by combining the two, the Alliance will concentrate contracts for 8m tonnes, which should bring savings. PSA, incidentally, puts its steel contract out for tender every six months.
To this end, the two are forging ahead with new organisations to get all this up and running.
According to the genial Frederic St Geours, PSA’s director-general and one of the architects of the Alliance, preparatory work started in earnest on March 1st.
To co-ordinate the efforts, an 8-strong steering committee made up of four directors form each company will manage the Alliance. One of the main functions of that committee will be to oversee the four platform organisations that they’ve agreed to share resources on — B and D segments, crossovers and MPVs.