Peugeot and GM logos

General Motors bought a seven-percent stake in Peugeot earlier this year for €320 million ($430M U.S.), the obvious aim being the $2 billion in savings from synergies like shared platforms, components and joint purchasing power. Yet the trouble that made the partnership worthwhile for Peugeot has only got worse since the agreement was signed: it had to issue stock for GM to buy, depressing its share price. It later sold its Paris headquarters to raise money, but its plan to cut jobs and reduce overcapacity – the European industry's number one bugbear – has been repeatedly nixed by the French government. According to reports, Peugeot is losing more than $200 million every month and the government's new plan to help it sell more cars is of dubious near-term value.

According to Reuters, those developments have had a deleterious effect on Peugeot's stock price, and by extension, the value of GM's stake. What cost The General €320M four months ago is now worth €146M ($180M U.S.), leading GM to consider taking an impairment charge on the loss of value. GM feels the situation is temporary and that the price will recover as the European industry picks up, and to be fair, analysts and other observers also expect things to recover – predictions have ranged from late next year to the next two years, but no one knows when. GM has only said that if the situation doesn't change in the "near-term," it will take the charge but hold onto the stake "until its fair value recovers."