GM News: GM and PSA Tie-Up Talks Come To Halt

[William Maley]

William Maley

Staff Writer - CheersandGears.com

November 14, 2012

The talks between General Motors and PSA-Peugeot/Citroën have come to halt. According to Reuters, the talks were stopped due to worsening finances and a government-backed bailout.

As we have been reporting since February, General Motors and PSA have been in talks about expanding their alliance. Rumors have ranged from 50/50 deal, selling Opel to PSA, buying up PSA's auto division, and putting Citroën, Opel, and Peugeot into one new entity.

Sources close to talks tell Reuters the talks have been off after Peugeot agreed to take a bailout from the French Government. Peugeot/Citroën are currently burning through 160 million euros (about $200 million) a month. Taking the bailout also means PSA can't shed anymore jobs and factories, nor make any deeper ties with GM.

"They now consider that any deeper tie-up is unlikely before 2014, when the market picks up," a source told Reuters. "The government bailout conditions rule out French job cuts, which means a deal can't happen any faster. It would be politically impossible to have all the cuts falling on the German side."

For the time being, GM and PSA's basic agreement stands.

Source: Reuters

William Maley is a staff writer for Cheers & Gears. He can be reached at [email protected] or you can follow him on twitter at @realmudmonster.

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[G. David Felt]

We'll that sucks and will not help the long term situation of the company. Europe is going to have to come to terms with their over supply glut and close factories and shed jobs.

[ZL-1]

The deal would probably be a better long-term solution than the bailout, but hey... Sh*t happens... The sad ting is that GM seems to be unable to find itself a European strategy that lasts for more than 6 months... :-/

[G. David Felt]

The deal would probably be a better long-term solution than the bailout, but hey... Sh*t happens... The sad ting is that GM seems to be unable to find itself a European strategy that lasts for more than 6 months... :-/

Too true, the world has got to come to terms that the over spending social way of life is at it's end and the future generations are the today generation that has to pay for this crazy spending. You cannot have everything and not have to pay for it.

GM needs to find a long term solution and that could mean closing down Opel and walk away and come back in with a new org and line of product. I doubt most counteries can afford to pick up and save a bleeding company now.

[vonVeezelsnider]

and so dies my dreams of a captive-import Citroen C6 successor lol.

I suspect that it doesn't play well now that the home government has gotten involved in the situation.

Edited November 15, 2012 by vonVeezelsnider