It always sounds good on paper: When one automaker buys another, the synergies and benchmarking benefits are supposed to flow like water.
The problem is that cultural complications, a not-invented-here syndrome or other snags can make it hard for companies to generate real savings simply because they are aligned.
Consider Opel, which PSA Group acquired from General Motors last year. Under GM, Opel was presumably free to sop up best practices from other GM units around the world. Only that never quite worked out. However, under PSA, Opel CEO Michael Lohscheller says benchmarking has paid huge dividends and has been a key factor in helping Opel/Vauxhall cut costs and reverse losses.
Opel reported a first-half operating profit of €502 million ($587 million) and achieved a 5 percent margin in a remarkable turnaround under PSA.
"If you can compare and benchmark, it's very meaningful and very powerful," Lohscheller told Automotive News Europe. He said this wasn't anywhere near as effective under GM.
"It's much more powerful within one region than on a global basis. Comparing Europe with China or the U.S. is quite difficult," Lohscheller said.
PSA said Opel delivered a 28 percent reduction in fixed costs in the first half.
"A 28 percent reduction is enormous," Lohscheller said.
The biggest savings came from manufacturing. Opel has "compressed" assembly plants to make them more compact to save in areas such as logistics and has reduced complexity, he said.
For example, at Ellesmere Port in northwest England, Opel cut staff by around a third to cut production of the Astra and Astra Tourer compacts to a single shift. The plant was benchmarked against PSA's flagship plant in Sochaux, France, and was found to be building cars at twice the cost.