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GM Sells Stake in Peugeot

Move follows decision to scale back – but continue alliance.

by on Dec.12, 2013

Peugeot and GM maintain a more distant relationship than originally planned.

Hours after announcing it would scale back – but continue – its alliance with PSA Peugeot Citroen, General Motors revealed it was selling off its 7% stake in the troubled French automaker.

Without those economic ties, industry observers say there appears to be even less of a reason for the two manufacturers to continue any long-term affiliation beyond the two product sharing deals and a few smaller arrangements they currently plan to move ahead with.

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GM initially purchased its stake in Peugeot last year at a time when the two makers expected they could achieve $2 billion in savings by working together.  Both companies have been losing billions in Europe in recent years. But since initially inking their alliance both have shifted strategies, raising ongoing questions about whether they could meet their original goals.


GM Scales Back Alliance with France’s Peugeot

by on Dec.12, 2013

The Peugeot HR1 battery car concept. Peugeot itself now needs a charge-up.

General Motors is scaling back its once-promising alliance with French automaker PSA Peugeot Citroen – though it says it will move ahead with the partnership in a bid to trim the losses of its own struggling European operations.

The announcement comes barely a week after GM said it would pull its Chevrolet brand out of the European market to put more emphasis on reviving its German-based Opel division.  There had been growing questions about whether GM and Peugeot would continue the partnership they once said could save about $2 billion in shared costs by 2018.

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Moving ahead, noted a GM release, the program will continue to focus on the “main pillars (of) purchasing and logistics, focused on Europe, and extends into cross manufacturing.” But the partners will reduce the number of products they will jointly develop, going forward each now intending to produce one vehicle for the other by 2016.


GM May Back Away from Alliance with Peugeot

Talks aimed at expanding alliance put on hold.

by on Nov.14, 2012

GM's turnaround plan for Opel included new products like the Adam, plant cuts and an expanding alliance with France's Peugeot.

After 14 years of massive losses, General Motors is hoping to turn things around for its German-based Opel brand by closing plants, adding new product – and teaming up with the equally troubled French automaker PSA Peugeot Citroen.

The deal announced by the two makers last February was expected to save each at least a billion dollars by sharing product development, component production and more. And as recently as during the Paris Motor Show, in September, GM and PSA were hinting they saw the opportunity to take things even further.

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Now, it appears, GM isn’t quite so sure.  The U.S. giant is reportedly putting on hold talks aimed at expanding the alliance, the Reuters news service indicating there’s concern about Peugeot’s commitment in light of the multi-billion-dollar bailout it will now get from the French government.

A GM spokesman confirmed the original alliance is moving ahead, “as planned,” but declined to discuss efforts to expand the partnership.


Analysts Call on GM to Dump Opel

“Find a new home” for faltering brand.

by on Sep.06, 2012

GM CEO Dan Akerson is coming under increasing pressure to fix -- or dump -- Opel.

General Motors Chairman and CEO Dan Akerson recently let his guard down for a brief moment, hinting GM made a mistake by not selling off its Opel brand back in 2009, shortly after the U.S. giant emerged from bankruptcy.

Apparently, a growing list of analysts and other observers would agree, warning that the U.S. maker simply won’t be able to stop the hemorrhaging of the German-based Opel which is now heading for a 13th year of red ink.

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“One of the worst things in the auto industry is owning a cash-burning, resource-consuming business,” warns Adam Jonas, lead auto analyst for Morgan Stanley, who has now downgraded GM shares to “overweight,” largely due to the continuing problems the maker has in Europe. “We believe the time has come for GM to find a new home for Opel.”


GM Beats Forecast – But Earnings Still Hurt by Europe

North America on the rise.

by on May.03, 2012

GM CEO Dan Akerson during a recent visit to China.

General Motors reported a $1.0 billion profit, equal to 60 cents a share, for the first quarter, handily beating analysts’ expectations – but the numbers would have been substantially better were it not for the maker’s continuing problems in Europe.

Once forecast to be back in the black this year, GM Europe lost $256 million for the January to March quarter, with GM taking another $590 million writedown in what is now likely to become the subsidiary’s 12th consecutive year of losses.

But those losses were offset by unexpectedly strong numbers from the maker’s home operations in North America, where GM earnings rose 35%, to $1.7 billion.

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“It’s a long-term path that we’re on to get to the profitability levels that we want,” Dan Ammann, GM’s chief financial officer, said during a conference call with reporters. “This is a solid quarter: revenue growth, profit growth, margin growth, cash flow improvement.”


GM Takes 7% Stake in Peugeot.

Peugeot already looking to expand GM alliance.

by on Mar.28, 2012

GM CEO Dan Akerson and PSA Peugeot Citroen CEO Phillippe Varin.

General Motors now holds a 7% stake of French automaker PSA Peugeot Citroen, the first critical step in an alliance announced a month ago – and one that the French automaker is already signaling it would like to expand.

GM’s acquisition was linked to a new Peugeot stock offering that the Paris-based maker intended to raise 1 billion Euros ($1.32 billion) in much-needed capital.  In fact, demand for the share issue by Europe’s second-largest automaker ran about 78% above the original target, at 1.78 billion Euros.

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GM now becomes the second-largest shareholder in PSA Peugeot Citroen after the founding Peugeot family.  Represented by several key executives, including chairman Phillippe Varin, the family itself holds a 25% stake – but has 38% of the corporate voting rights.


GM – Peugeot Announce “Broad-Scale” Alliance

Partners anticipate improved European competitiveness.

by on Feb.29, 2012

The new partnership brings "tremendous opportunity" for both companies says GM CEO Dan Akerson.

General Motors and PSA Peugeot Citroen have confirmed the creation of a “long-term and broad-scale” strategic alliance they expect to contribute to improved profitability and competitiveness, especially in the weak European market where both makers have been struggling.

As part of their new partnership GM will take a 7% equity stake in the French manufacturer, becoming the second-largest shareholder in PSA after the founding Peugeot family, which will continue to hold a one-third stake in the firm.


“This partnership brings tremendous opportunity for our two companies,” said Dan Akerson, GM CEO and Chairman. “The alliance synergies, in addition to our independent plans, position GM for long-term sustainable profitability in Europe.”


Could Fiat/Chrysler Make a Bid for Peugeot?

Marchionne hints he may try to outbid GM for French alliance.

by on Feb.29, 2012

Might Fiat/Chrysler CEO Sergio Marchionne be the spoiler in talks between GM and Peugeot?

Might the Fiat/Chrysler alliance try to outbid General Motors to set up a global automotive powerhouse with French automaker PSA Peugeot-Citroen?

It’s clear that Fiat/Chrysler CEO Sergio Marchionne sees that as a potentially powerful alternative to letting PSA tie up with General Motors.  As reported this week, GM is apparently seeking a 7% stake in the French company, while the two partners would set up a series of joint ventures to develop new products and powertrains.

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But according to a report by Dan Howes, of the Detroit News, Marchionne is ready to step in as the spoiler.  He previously considered an alliance with Peugeot, having approached the French maker with the idea of an alliance during the Geneva Motor Show three years ago, even as Fiat was considering the option of buying GM’s struggling Opel division – then on the auction block.


GM May Take 7% Stake in France’s Peugeot

Proposed alliance unlikely to resolve GM's Opel problem.

by on Feb.28, 2012

Will GM CEO Dan Akerson approve an alliance with PSA Peugeot-Citroen?

General Motors could take as much as a 7% stake in French automaker PSA Peugeot Citroen as part of a new alliance the two manufacturers are putting into place.

The alliance is expected to involve a variety of different areas of business, notably including joint vehicle and powertrain development, according to knowledgeable sources.  The key goal for both manufacturers would be to improve their economies of scale, especially in Europe, where GM last year lost $747 million.  But whether the proposed alliance will help turn things around for GM’s red ink-stained Opel division remains to be seen.

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Peugeot is the Continent’s second-largest maker on a unit sales basis but has serious problems of its own, rising debt leading it to plan a 1 billion Euro ($1.34 billion) rights offering that notably could reduce the holdings of the founding Peugeot family.

Beyond possible cross-holdings, the alliance appears to focus on three areas, according to sources: (more…)

GM in Alliance Talks With PSA Peugeot Citroen

Makers discussing “cooperations and alliances.

by on Feb.22, 2012

Does GM CEO Dan Akerson see a partnership with PSA as a way to solve Opel's problems?

General Motors and PSA Peugeot Citroen have confirmed they have begun discussing “possible cooperations and alliances.”

Both makers cautioned that their talks are still too early to discuss in detail, though industry sources are indicating that the U.S. maker, the world’s largest, and French-based PSA, Europe’s second-largest automaker by sales, are focusing on a manufacturing alliance – though some sort of joint product development could be in the cards, as well, other sources suggested.

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Such a move could be critical for GM, which is struggling to staunch ongoing losses at its German-based Opel subsidiary.  Despite hopes that its European operations would be back in the black, GM suffered a $700 million loss in 2011, raising concerns about the company’s prospects despite a record global profit of $7.6 billion for the year.