General Motors Pulls Out Of PSA JV As Sales Continue To Drop
(Reuters) – General Motors Co have halted talks on a deeper tie-up with PSA/Peugeot-Citroen amid misgivings about the French carmaker’s worsening finances and government-backed bailout, people familiar with the matter told Reuters. The companies, already pursuing an operational partnership announced in February, had also been exploring a full combination of PSA with GM’s European unit Opel, which is based in Germany. But two sources with direct knowledge of those discussions said they were broken off after PSA accepted a state guarantee for its lending arm last month and announced a further deterioration of its cash position. PSA, which is burning though 160 million euros ($200 million) of cash a month, is scrapping 10,000 jobs and its Aulnay plant near Paris. GM, which predicts European losses of $1.5-1.8 billion this year, is in union talks to close an Opel factory in Bochum, Germany. An imminent tie-up would have required deeper plant and workforce cuts on both sides, the same sources said.
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