The Peugeot family has offered to surrender control of PSA/Peugeot-Citroen as the carmaker revive plans forging closer connection with General Motors' Opel through a capital injection, sources told Reuters. Any agreement merging PSA with Opel would encounter major political opposition since it would result to more site closures and job losses in France and Germany, people privy with the talks told Reuters.
The Peugeot clan is turning to GM after shoving away other potential investors like Dongfeng Motor Group, which is PSA's production partner in China, the sources said. One of the sources told Reuters that PSA is trying to convince GM to merge the French carmaker and Opel since both have the same problem -- excessive production capacity.
The source noted that now that the Peugeot family has accepted that they will lose control of PSA, "this no longer an issue." The Peugeot family owns a 25.4 percent stake in PSA, giving the clan a 38.1-percent command of voting rights in the carmaker. On the other hand, GM holds a 7-percent stake in PSA.
Sources told Reuters that before injecting more capital into PSA, GM would need assurances that it could cut production capacity as manage the merger of the French carmaker and Opel. Peugeot, Citroen and Opel are among the brands suffering the most from the worsening demand for vehicles in Europe. [source: automotive news - sub. required]