General Motors will not invest further in PSA at this time

Article by Anita Panait, on June 20, 2013

General Motors chief executive Dan Akerson reiterated that the carmaker has no intentions to pour in more money into troubled PSA/Peugeot-Citroen at this time. He added that if they see some changes, they will make an evaluation. The French carmaker is shutting down its Aulnay site and is trimming its workforce by 8,000 jobs to remain afloat.

PSA may need to raise fresh funds by initiating a share sale as it continues to use up cash to finance its operations, two sources privy with the matter told Reuters in May. GM holds a 7-percent stake in PSA and has inked a wide-ranging alliance with the French company in February 2013. GM wrote down around half of its $423 million investment in PSA.

Akerson remarked that one of the premises of the alliance was “we've got to fix our problem, and we've addressed it, and continue to make progress." He remarked that PSA needs to address its own issues, adding that the French carmaker is doing that as well. In February 2013, GM chief financial officer Dan Ammann remarked the US carmaker had no intention to invest further into PSA.

GM and PSA are some of the carmakers that are heavily affected by the current fiscal and economic crisis in Europe. GM has said it plans to achieve a breakeven in Europe by mid-decade. [source: Reuters]

Topics: gm, psa, investment

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