Opel-Peugeot Closer Tie-Up Talks Put On Hold

#Peugeot

Opel may now be working with Peugeot, but a deeper alliance is off the table, Reuters reports. General Motors' Opel and Peugeot were in the process of creating a closer tie-up, but that plan is on pause, partly as a result of Peugeot's ongoing financial issues and the company's acceptance of a government-supported bailout. Now, a deeper connection between the two automakers isn't likely to occur before the 2014 calendar year at the earliest.

Peugeot's government bailout conditions are said to prevent job cuts in France, and as one Reuters source notes, "it would be politically impossible to have all the cuts falling on the German side." So a closer relationship between the two companies, which would have meant more plant and job cuts, isn't going to happen any time soon.

Just a few weeks ago, we reported on the specific vehicles and new platforms that could benefit both automakers. Through what's called the Global Strategic Alliance, the automakers could share a platform underpinning the Peugeot 308 and Opel Astra, plus a smaller car platform and one for compact crossovers. Other potential vehicles included a low-emissions compact global platform and a compact van for Opel.

GM said that the alliance could help the two automakers save a staggering $2 billion over the course of five years, but depending on how helpful the aid is Peugeot gets from the French government, it's unclear how much help the automaker will want from Opel. Ford has already announced it will no longer make large diesels with Peugeot, and BMW no longer collaborates with the automaker on hybrid technology.

With no end in sight for Europe's automotive industry troubles, we've definitely not heard the last of this story. For now, the companies' basic partnership remains.

Source: Reuters

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