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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.


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 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.