Lion over troubled waters

PSA-Citroen is taking drastic measures to stabilise capital losses. GM takeover might be possible.

Founder of the PSA family, Peugeot is seeking ways to save itself from hitting the axe. As reported by Reuters, the ailing French marque might consider GM's takeover if there is lack of capital balance for the business to run by end of 2013.

As stated, GM's takeover will involve a series of revamps throughout the firm. One major move that GM is planning involves factory closure's in France and Germany, but many are still optimistic about the move. The French government would never allow that to happen on their very own soil, even if Peugeot needs to lose a few plants outside of France.

Peugeot has seek finance and business aid for these past months. But due to lack of bidders that is willing to save the company from GM's arm, Peugeot might just end up with GM if there are no takers stepping-up for them. The move was made with the support of current PSA Chief Executive Phiippe Varin, reports Reuters.

Speaking to Reuters, a few internal sources have finally admitted that the Peugeot family has now accepted that they'll lose control. Currently, PSA-Citroen will need to rework a new plan which involves underwriting for a capital increase, and GM remains the only hope for now. To date, GM owns seven-percent of the PSA-Citroen group.

The deal now hinges on GM. Sources say GM bosses need assurances that they would be able to cut plants and jobs “at reasonable cost.”