Filed under:
Europe,
Government/Legal,
Plants/Manufacturing,
GM,
Earnings/Financials,
Opel,
Peugeot,
Citroën
The partnership
General Motors (via
Opel) and PSA
Peugeot/
Citroën began in February has produced more declarations and revisions than easily identifiable positive movement.
A deeper collaboration between Opel and Peugeot has been mentioned a few times, perhaps even a sale of one to the other, and
a report in October laid out joint plans like a small MPV for Opel/
Vauxhall, a small car for both Opel and Citroën and two new platforms for small and midsize cars.
What observers can't glean from the proclamations is how all this can happen with Peugeot
in constant, and worsening, financial trouble. The French company
just accepted a bailout from the French government, the cash position at its lending arm so bad that the interest rates it had to charge were pricing it out of the car-loan market, and a new report in
Reuters says that Peugeot is losing $200 million per month.
That cash-burn rate is
better than a few months ago, but the
Reuters report explains that the French government loan is "sabotaging" any chance of a closer tie-up between the two companies, said to include the possibility of "a full combination of Peugeot with GM's European unit Opel." That particular option, with a $5-billion buy-in from GM, could have allowed GM to get Opel off its books by making it part of a separate entity. The French government's terms for the loan, however, mean that Peugeot can't shed workers and factories as it would need to in order to make the new entity, and any deeper ties with Opel, viable.
Beyond that, the plan to jointly develop a small car for Peugeot in Brazil has been shelved, Peugeot has left Iran, it's second largest global market, and has given up ties on other technology projects with
Ford and
BMW. GM has no interest in other Peugeot initiatives like a push into India and rechargeable hybrids. It's said that more cooperation between the two will have to wait for a turnaround in the European market, expected in 2014.
GM, Peugeot cease tie-up talks over French bailout issue originally appeared on
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Report: GM, Peugeot cease tie-up talks over French bailout issue
