GM, PSA suspend talks on a deeper tie-up

Article by Christian Andrei, on November 15, 2012

Talks between General Motors and alliance partner PSA Peugeot Citroen about entering a deeper relationship have stopped due to concerns related to the declining finances of the French automaker and the implications of the government-supported bailout, according to sources. Last February, the companies announced that they’ve agreed to an operational partnership.

The two parties had also started to explore a full merging of Peugeot with GM's European unit Opel, which is headquartered in Germany. Two sources said that the discussions were stopped after Peugeot last month agreed to a state guarantee for its lending arm. Another factor was Peugeot’s revelation that its cash position had weakened further.

One source said that the automakers agreed to hit ‘pause’ on the early-stage discussions about a Peugeot-Opel agreement. He added that the plan is suffering due to the government bailout. Another source said that it’s highly unlikely for a deeper tie-up to take place before 2014, which is when the market is predicted to improve.

This is because under the government bailout conditions, there won’t be French job cuts and so it would be “politically impossible” for all the job losses to be limited to Germany.

According to a Peugeot spokesman, there are no ongoing Opel tie-up talks. He declined to divulge if there were previous discussions. GM has yet to comment on the issue. Operating the plants of Peugeot and Opel in France and Germany costs a lot of money and they’re exposed to struggling southern markets. This is why they are much affected by the slowed demand in European auto sales and the resulting surplus capacity.

Topics: gm, psa, partnership

If you liked the article, share on:


Login or Create new account to add a comment!


Many have been excited with the impending arrival of the next-generation Jeep Wrangler and the new 2019 Jeep Grand Wagoneer, which is slated to be the brand’s new range-topping model....
by - October 21, 2016
Chevrolet has taken the wraps off its new Chevrolet Colorado ZH2 at the fall meeting of the Association of the United States Army (AUSA). Tagged as the most extreme fuel-cell-powered...
by - October 21, 2016
Honda has unveiled the fifth generation of its hot-selling SUV – the 2017 Honda CR-V. The latest iteration of the CR-V should help it maintain its benchmark status in the...
by - October 21, 2016
Many are already expecting BMW to launch an ultra luxurious SUV that will serve at its new flagship by late 2018. Larger than the X5 and X6, the new X7...
by - October 21, 2016
Most of you may have heard or already have one of those autonomous home appliances doing the house chores. Thus, it’s not anymore unusual to see a car going places...
by - October 20, 2016