It's doom and gloom time, folks – PSA Peugeot-Citroën is seriously on the ropes. According to a report from Reuters, citing those ever-so-mysterious "people familiar with the matter," suggests that the Peugeot family, which currently owns a 25.4-percent stake in the eponymous automaker and 38.1 percent of voting rights, "has now accepted that they will lose control" of the company. The rumormill churns with the possibility that control of Peugeot and Citroen will be handed over to General Motors, which spent $423 million to obtain seven percent of Peugeot last year.

If GM doesn't accept control of Peugeot, which would require a cash outlay that GM has already said it isn't going to spend (at least not without assurances that it will be allowed to shutter factories and lay off workers in France and Germany), analysts predict Peugeot will run out of cash before the end of 2013. Peugeot had previously turned to Dongfeng, a Chinese company it has allied with in the industrial sector, for assistance, but those talks have apparently stalled.

What would GM do with Peugeot if it were to make an additional investment? The answer is murky at best, but previous speculation had pinned a slew of shared platforms between the French automaker and GM's European arm, Opel, along with the consolidation of workforce and manufacturing capabilities. In other words, plant shutdowns, laid-off workers and the expected monetary savings those actions would bring.

The problem with the above scenario, though, is that the French government, which made a controversial investment of 7 billion euros ($9 billion USD) in the automaker's finance arm to guarantee its loans, is likely to resist large-scale workforce reductions and plant closures within its borders. Doom and gloom, indeed...


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  • 65 Comments
      Deneway
      • 1 Year Ago
      Why take over control of another failing company. Opel is a total train wreck.
      Colin
      • 1 Year Ago
      The European car market has had too many manufacturers for a long time, and they all know that. GM is hanging on, as are all the others, and playing a giant game of dare. Sooner or later one of the big ones will fold and then the others will divvy up the remaining market between them. Not many people expect the European market to grow, and with China on the horizon we are living in interesting times! Ford and GM in Europe produce a very similar range of cars, the French tend to be slightly more idiosyncratic, as does Fiat, but Peugeots and Citroens have shared so much between them recently that you have to wonder what the point of the two brands is, as too often only the badges differentiate them. One or the other make, perhaps, but not both. But then one relatively small French maker, with very limited export potential - their African market has gone East - certainly isn't going to last. Fiat has joined Chrysler and has world brands like Ferrari and Maserati on its books. GM has a large American maker behind it, notwithstanding GM's home grown difficulties, but Peugeot/Citroen... no, nothing behind them except the French government and an angry workforce. The glory days of Citroen are over, and as for Peugeot, well?
        • 1 Year Ago
        @Colin
        [blocked]
      jfa1177
      • 1 Year Ago
      This is an unmitigated rumor and nothing more. If anybody would be interested in PSA its gonna be the Chinese. Maybe not Dongfeng but perhaps Great Wall motors or another brand. It was stated here not long ago that one of the Chinese brands was looking to buy a stake in a European brand to help speed up entry into the global market.
      JaredN
      • 1 Year Ago
      The last thing GM needs is too more failing European nameplates.
      Avinash Machado
      • 1 Year Ago
      Quite sad news.
      • 1 Year Ago
      [blocked]
        Farmerboy
        • 1 Year Ago
        Stupid is named Laser
        Eric
        • 1 Year Ago
        Your complete lack of macro and micro economists with letting a company down like GM would have been catastrophic for the world economy (yes world, I'd suggest you read a bit on this). Furthermore, do you seriously believe that Hyundai is not secretly helped? Or the Japanese companies continuously requesting the yen to be devalued (and government has cooperated plenty of times) and receiving help? You my friend, seriously don't grasp the full spectrum of how deeply auto companies receive help from their respective and foreign governments.
          nsxrules
          • 1 Year Ago
          @Eric
          Eric, you drank the Kool aid. GM failing would have barely made a difference in the us economy, let alone the world. They wouldn't have disappeared, just restructured. Saving GM was a political move and based on your ignorant post it worked
          axiomatik
          • 1 Year Ago
          @Eric
          @nsxrules In 2009, GM would never have been able to secure private funding to finance a restructuring. Every single major bank in the country was living off of TARP funds. Banks were not willing to gamble tens of billions of dollars on GM when they were barely hanging on to solvency themselves.
        Porsche4life
        • 1 Year Ago
        First off they didn't steal they borrowed money which means theyr paying back. The taxpayer could of said no. But there is nothing wrong with pitching in to help a huge company in your country to stay up on its feet. GM is a great company and I believe theyr making a huge progress.
          nsxrules
          • 1 Year Ago
          @Porsche4life
          To be fair the tax payers were not given a choice and many lost thousands when the us government bailed the unions and stiffed creditors
        tiger
        • 1 Year Ago
        Laser, pull your head out of your a$$, GENERAL Motors paid back the government loans years ago, ahead of schedule. Further, GENERAL Motors is NOT the only company that gets tax breaks. Do some research before posting.
        • 1 Year Ago
        [blocked]
      nsxrules
      • 1 Year Ago
      This is a stupid move. GM proved dozens of times that hey were incapable of turning themselves around. It took the bailout and screwing creditors to finally give GM some breathing room. PSA needs to be smart and reach out to successful and we'll managed companies such as Toyota, Honda, Hyundai, etc. Etc. If they really want a successful turnaround
        onewayroll
        • 1 Year Ago
        @nsxrules
        I'm no GM fan, but have you not seen the pretty damn good products in there dealer ships lately? I'd say they have made a pretty good turnaround.
        Wacko
        • 1 Year Ago
        @nsxrules
        yeah like honda is well managed!!
      aatbloke1967
      • 1 Year Ago
      This is the perfect story for the naysayers who rely way too precariously on media speculation. The protracted economic molestation in Europe caused by the banks is having little effect on the banks themselves, who despite all that has passed are still engaging in their nefarious activities. PSA will survive, but in a dramatically different form in the same way Chrysler Europe did after being bought out by PSA in 1978. China is going to be the major salvation for all western manufacturers in the next thirty years, and some, like PSA, will be forced to succumb sooner rather than later. GM will follow suit ultimately, so reports of their salvation of PSA are sheer folly.
        RGT881
        • 1 Year Ago
        @aatbloke1967
        http://www.youtube.com/watch?feature=player_embedded&v=Osq1yxSFVG0 Why are you so readily blaming the banks and yet omitting to place any kind of a blame on French government and its continuous irresponsible behavior. Banks are not lending yes, because they are undercapitalized and yes while they have loans from the government they are choosing not to lend because that's extremely risky. See collapse of LTCM. Moreover, why would banks fund someone's loss rather than profit? Banks would be a lot better off if the interest rates would be higher and they wouldn't have to chase the ROI in risky instruments. Disingenuous statement really.
        JonnyO
        • 1 Year Ago
        @aatbloke1967
        You mean it has nothing to do with the fact that the European manufacturers have a glut of excess capacity? Or the fact that PSA hasn't made a truly successful car since the 1990s? Or that France's fairy-tale labor laws hinder productivity and handicap struggling companies? The banks may have caused problems, and the far-left love to blame them for everything from failed mortgages to their girlfriend not putting out and everything in between, but there's more to the story than that. Open your eyes.
        aatbloke1967
        • 1 Year Ago
        @aatbloke1967
        Criminal banking practices of European banks in the subprime market caused the European economy to crash as part of the global downturn in 2008. It is a travesty that the likes of James Crosby, who drove HBOS off a cliff, have never faced criminal charges. I am not blaming the banks for the issues with PSA - although the finance industry is still supporting stock indices abormally high - but all of the European manufacturers are suffering from economic stagnation due to high unemployment, a complete lack of consumer confidence, and frustratingly slow pockets of recovery caused by ill-conceived austerity measures. PSA themselves desparately need a supermini which carries the same mantle as the 205, and a return to UK manufacturing would help its cause in that market, its second largest after France. However. a saturated marketmeans it has to restructure and find new product avenues, a situation faced by all of the mainstreams. French labour laws are governed by the EU and not at fault for PSAs protracted woes. The market will have to contract before we see improvement. But thank goodness for the EU in legislating the bonuses of the avarice of bankers the economy cannot sustain.
        aatbloke1967
        • 1 Year Ago
        @aatbloke1967
        Interest rates will continue to be suppressed while austerity policies remain in place and the lack of encouragement for home building and manufacturing growth is sustained.
      Snark
      • 1 Year Ago
      The problem is the same as it's been since the start of the Carpocalypse. The world car market is supersaturated with brands. The pie has been cut into too many pieces, and those pieces are so narrow that a few are crumbling. Yeah, yeah, yeah, choice is good, sure....but Dodge, Peugeot or Citroen or both, Mitsubishi, Suzuki, Opel, SEAT, and if we really want to be brutally honest Alfa Romeo and Mazda are all brands that can attract fewer buyers than they're worth to keep afloat. PSA Peugeot Citroen is dead. I imagine a Chinese company or GM might try to keep Citroen around, but Peugeot is probably a dead brand walking. It's sad, but it's time for the final contraction to happen.
      Jmaister
      • 1 Year Ago
      just dont kill these two like it did SAAB.
        • 1 Year Ago
        @Jmaister
        [blocked]
      Porsche4life
      • 1 Year Ago
      Unless GM wants to gamble by taking over. I personally think it should take the gamble and invest in already made brand and rework everything. I believe GM could turn things around.
      • 1 Year Ago
      [blocked]
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