Looking for a way to fix its ailing European operations, which was the only ointment in its crown in 2011 when it regained the number one spot in world car sales, General Motors formed an alliance with PSA Peugeot Citroen last March.

On paper, it was a win-win situation since Opel/Vauxhall and the two French carmakers would share development and parts purchasing costs and make the best of their plants’ capacity. For both groups it was probably the only way to stop bleeding money in the declining European market.

As part of the deal, GM acquired a 7 percent stake in its French partner for the paltry sum of US$423 million (€320 million). Yet, according to a report from Bloomberg, the US carmaker may have to write down its investment due to its falling value.

Since February 28, one day before the deal was sealed, PSA Peugeot Citroen shares have declined by 56 percent. This means that five months later GM has lost more than half its original investment.

The Detroit company said in a filing with the U.S. Securities and Exchange Commission on August 3 that it will hold on to its investment until its value improves.

“We assessed whether the decline in value represented an other-than-temporary impairment and concluded that the impairment is temporary”, GM said in its filing. “The recent economic uncertainty is weighing heavily on the valuation of PSA. Should market conditions not recover in the near-term, we may conclude the impairment is other than temporary, resulting in an impairment charge.”

It’s no wonder that PSA Peugeot Citroen shares have tumbled: in 2011, it burned through €200 million (US$ million) each month, while posting a €662 million (US$ million) loss and saw its share in the European market drop by 14 percent in the first half of this year.

The French group is not sitting idle, however: it put its Paris head office for sale and plans to slash 8,000 jobs and shut down the Aulnay plant near Paris.

Opel’s chairman of the board and interim head of GM’s European operations Steve Girsky acknowledged that they need to speed things up: “We haven’t moved fast enough to fix the things we can control,” Girksy said on August 2. “We have a clear plan how to change that.”

Part of this plan is building the next generation of their mid-size sedans (i.e. 508/C5/Insignia) on a common, GM-developed platform and Opel possibly closing down its Bochum plant, something CEO Dan Akerson is currently negotiating with the workers’ unions.

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