The relationship between General Motors and PSA/Peugeot Citroën got off to a bumpy start last year, and Automotive News says that the tie-up between the two automakers will be short-lived. Heavy losses from both companies is causing the alliance to be scaled back, but PSA's talks with China's Dongfeng could kill the deal altogether.
The partnership between General Motors and PSA Peugeot-Citroën isn't expected to produce any results until 2016, but it has created plenty of news (and speculation) since it was formed back in February. Now, GM is laying out some of the specifics of the deal while Automotive News Europe is reporting plans have been scrapped to produce a shared platform for a midsize sedan.
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.
Let's face it, even when they go well, partnerships rarely go as planned. Almost eight months after General Motors spent $423 million to snag seven percent of Peugeot, we on the outside are still wondering what the plan is. When the tie-up was announced, the main benefits were listed as purchasing power and platform sharing, and only a month after that, a deeper collaboration was discussed that would involve development of a dual-clutch transmission and a small car for Latin America.
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 red
General Motors wants to become the second-largest shareholder in PSA Peugeot Citroen, and the gears of a deal for seven percent of the French automaker are beginning to mesh. It cost General Motors $423 million to buy into PSA, and the companies will remain competitors despite lashing their rafts together.
Automotive News is reporting that stories in two other papers, France's La Tribune and England's The Financial Times, assert that General Motors and PSA Peugeot Citroën are "in advanced talks about an alliance." Neither maker would comment on the stories, but it has been well documented that both are looking to turn around their European operations. Peugeot's parent announced 6,000 job cuts late last year and the immediate cessation of Le Mans racing this year. Opel lost hundreds of million