French Labor Minister Xavier Bertrand has divulged that PSA/Peugeot-Citroën and General Motors are in discussions about a possible manufacturing alliance.

French Labor Minister Xavier Bertrand has divulged that PSA/Peugeot-Citroën and General Motors are in discussions about a possible manufacturing alliance. Bertrand explained on radio station Europe1 that he was told this information by PSA CEO Philippe Varin.

The intentions of the alliance would be to consolidate the European loses of both companies with reduced production costs, according to Reuters.

The main strategy in achieving economies of scale pertains to the sharing of vehicles and parts as opposed to an exchange of shareholdings. However, if any capital exchanges were to take place, they would be only symbolic involving very small amounts.

As a result, the development of engines and transmissions as well as entire vehicles could be shared between the Peugeot/Citroën and Opel/Vauxhall brands.

Furthermore, with a gloomy outlook for Europe in the years to come, PSA could benefit from GM's success in China and Brazil. Speculating even further, GM could facilitate PSA's return to the U.S. market since it left in 1992.

Despite the potential synergies, PSA must remain cautious with consideration to the recent unfruitful alliance with Mitsubishi established in 2010.

 

Be part of something big