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Posts Tagged ‘peugeot bailout’

Peugeot Looks to GM as Potential White Knight

GM plays hard-to-get after past alliances all floundered.

by on Jun.28, 2013

Despite the addition of new products like the 3008 diesel-hybrid, Peugeot continues to stumble as the European slump drags on.

After more than 200 years in control of the company that still bears its name, the Peugeot family appears willing to cede control of PSA Peugeot Citroen in a bid to attract a white knight to rescue the fast-failing French automaker.

And with several potential partners, including Chinese carmaker Dongfeng, showing a notable lack of interest, Peugeot CEO Philippe Varin is now sounding out General Motors, according to several reports from Europe.  GM and Peugeot announced an alliance in early 2012 that the makers claimed would save them billions of dollars over the coming year through common purchasing, parts production and other efforts. But the proposal coming from the French maker would take things a significant step further.

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Like Peugeot, GM has been hard hit by the European economic crisis and recently announced the latest in a series of turnaround plans for its Continental operations – which have lost more than $16 billion in 13 consecutive years of red ink – including $1.8 billion in 2012. But with European car sales now dipping to their lowest levels in two decades, analysts are skeptical about how quickly it will be able to implement that plan.

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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.

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French Government Bails Out Peugeot

Move could threaten maker’s alliance with GM.

by on Oct.24, 2012

The Peugeot Onyx Concept at the Paris Motor Show.

With Europe’s automotive crisis worsening, the French government has prepared a bailout plans for PSA Peugeot Citroen. The plan to aid Europe’s second largest automaker revolves around a government-backed refinancing deal for the company’s lending arm.

The deal is creating significant controversy among both the French public and within the Socialist government elected earlier this year, some members of the cabinet of President Francois Hollande threatening to walk out over the move.

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“Banque PSA is now government-backed,” London-based Credit Suisse analyst David Arnold told Reuters. “It’s becoming increasingly obvious that selling assets won’t stem the cash outflow.”

Peugeot’s financial position has continued to deteriorate as car sales in western and southern Europe have collapsed, sending the maker’s stock to historic lows.

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PSA Peugeot Citroen Reportedly Seeking Government Bailout

Meltdown at French automaker spells problems for partner General Motors.

by on Jul.10, 2012

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

Growing increasingly desperate after watching another 13% sales drop last month, inside leaks suggest French automaker PSA Peugeot Citroen is looking for a bailout from the French government.

The troubled automaker denies the reports, however, this could be the first step in the negotiation process between Peugeot executives and the new French government, which appears highly unlikely to let the company flounder as the European recession spreads and eats into the automotive business across the continent.

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The reports also illustrate the underlying weakness of General Motors plans for fixing Opel, which leans heavily on forging a PSA-Opel alliance.

GM paid $400 million for a 7% stake in Peugeot earlier this year and is already turning to PSA for assistance in repairing its floundering European operations, which are steadily losing market share and piling up red ink. The losses at Opel are now expected to color GM’s second quarter earnings report, which is due August 2.

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