GM's French Connection Goes Sour

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The success of new Opel models like the Mokka SUV, a sibling of GM's Buick Encore, has GM thinking that the long-troubled Opel might be able to succeed on its own. Photo credit: General Motors Co.

Analysts were surprised when General Motors  took a 7% stake in French automaker PSA Peugeot Citroen early in 2012. It was clear what troubled Peugeot got out of the deal -- some cash, and a lifeline -- but what was in it for GM?

GM executives hoped that Peugeot and GM's German subsidiary, Opel, could do some parts-sharing and joint development deals -- deals that could help GM end years of losses at Opel. But Peugeot turned out to be a very troubled company, and GM balked when the Peugeot family suggested that the Detroit giant buy out their stake.

That led to a very messy situation, involving the French government, tough unions -- and now, a Chinese automaker riding to the "rescue." In this video, Fool contributor John Rosevear looks at the latest developments with GM's French connection -- and explains why GM shareholders might be better off if the whole deal goes sour.

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The article GM's French Connection Goes Sour originally appeared on

Fool contributor John Rosevear owns shares of Ford and General Motors. You can connect with him on Twitter at @jrosevear.
The Motley Fool recommends Ford and General Motors and owns shares of Ford. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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