Peugeot to become American? French could hand control to GM
The ruling Peugeot family could hand control of the world-famous French car maker to the parent company of Vauxhall, it emerged yesterday afternoon.News agency Reuters reported that the founding eponymous family could step away from its 131-year-old car making venture – ceding control to GM and its European brands Vauxhall and Opel. Peugeot has burned through €3 billion in operating cash last year as sales dried up and is desperate for investment to stay afloat.If accurate, the rumours point to a dramatic redrawing of the European car making map. Peugeot is as French as croissants and red wine and if GM’s European division stepped in to run it, there would be wholesale changes to factories and jobs across Europe.The embattled Peugeot family is desperately seeking cash to keep the carmaker in business; Peugeot Citroen has been haemorrhaging money in the past few years, as the European car market has proved stagnant and its high-volume cars have been squeezed by the premium cars from above and cheap Korean imports from below.Like Ford, the Peugeots are one of only a handful of surviving car dynasties. If they do sell up, it will mark the end of one of France’s most powerful industrial families.
After other investors, including Chinese carmakers, rejected the offer to invest in Peugeot, the family reportedly turned to GM, which already owns 7% of Peugeot.
“GM faces the same overcapacity situation with Opel, and that’s why PSA [Peugeot Citroen] is trying to convince them to merge the two,” one senior source told Reuters. “The Peugeot family has now accepted that they’ll lose control, so this is no longer an issue.”
Peugeot refused to comment on the news, and so did GM.