A merger, a tie-up, an alliance or a collaboration, whatever you call it, at the end of the day, it all boils down to one thing: how well two automakers can work together in order to minimize costs and maximize profits.
As previously reported, General Motors and PSA Peugeot Citroen are discussing a “strategic alliance” in Europe that could prove beneficial for both companies.
GM would find a way to cut costs in its Opel and Vauxhall brands, which are bleeding cash for what seems like forever, while Peugeot and Citroen would use GM as a means to increase their volume and lessen their dependence on the troubled European market by expanding elsewhere.
Citing unnamed sources close to both companies, Reuters reported today that General Motors is interested in acquiring a 5 percent stake in the French group, thus suggesting that the Detroit automaker is not interested in a full-blown merger but a cost-cutting alliance similar to the one formed by Daimler and the Renault-Nissan group.
Not surprisingly, both companies declined to comment on the report.
On paper, the proposed alliance looks like a win-win situation. Then again, many such marriages have been called off for whatever reason or even worse, ended up in tears.
Surely, some “old GM” folks should remember the last time the company formed an alliance with a European automotive group (hint: it now controls the fate of Chrysler), it cost the Detroit-based automaker no less than US$2 billion…
