GM's French Connection Goes Sour
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.com.
Fool contributor John Rosevear owns shares of Ford and General Motors. You can connect with him on Twitter at @jrosevear.
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