French car maker alliance to hand over control to GM
According to some reports, the founders of PSA Peugeot Citroen are apparently preparing to hand over control of operations to General Motors.
Reuters has it that the founding family of PSA Peugeot Citroen has offered to give control of their alliance to General Motors, a move that is part of a plan to see the relationship between the companies expand further.
According to these sources that informed Reuters, this possible future deal with GM will most likely lead to Peugeot to be combined with the US car maker’s European arm, Opel.
This unnamed source continued to say that GM is facing an overcapacity situation when it comes to Opel, and that is why PSA wants to convince them to merge the two European car-making entities. Apparently the Peugeot family has now accepted that control will be lost, so that is no longer an issue.
This is a very interesting and potentially problematic move, because there will certainly be some sort of political pressure being made because of the likelihood of associated job losses and plant closures that will happen both in France and Germany.
From the French side of things, the move is seen as a method of ensuring that Peugeot still has a future in car production as it is currently feeling the effects of the European car sales slump. This continent-wide sales slump has already resulted in a slew of job losses, plant closures and selling of assets.
According to a statement made back in April by Peugeot’s head of communications, Xavier Crespin, the French company has no other alternative but the GM alliance if it wishes to continue its existence.
Back in March 2012, GM acquired a seven percent stake in PSA Peugeot Citroen, with the Peugeot family – the founders of the French brand back in 1810, when it manufactured coffee mills and bicycles – holds a 25.4 percent stake in the company.
