General Motors And Peugeot Halt Talks Due To French Bailout Of PSA

General Motors and alliance partner PSA Peugeot Citroen have halted talks on a deeper tie-up amid misgivings about the French carmaker's worsening finances and government-backed bailout, people familiar with the matter said.

The companies, already pursuing an operational partnership announced in February, had also been exploring a full combination of Peugeot 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 Peugeot accepted a state guarantee for its lending arm last month and announced a further deterioration of its cash position.

The automakers have agreed to a "pause" in early-stage talks on a Peugeot-Opel deal, said one of the sources. The government bailout is "sabotaging the plan", he added.

mini22 - 11/14/2012 5:41:59 PM

+1 Boost

Unfortunately GM blew it's opportunity to either sell Opel to Fiat and later Magna. Now it is stuck unless it simply winds Opel down like it did Saab, Pontiac, Olds,Hummer, and Saturn.GM sure knows how to waste money.To bad Marchionne doesn't run GM.