Seeing as shedding weight has worked brilliantly for General Motors in the years and months following government bailout, they decided that best way to stay profitable is to unload unnecessary baggage. So they pulled the plug on Holden, as they did with Pontiac a few years ago, and now they are selling their stake in PSA Peugeot Citroen.
The American car maker announced the sale of its seven-percent stake or 24,839,429 shares in PSA through a private placement to institutional investors only a year after they acquired it.
They were supposed to cooperate, GM and PSA, to further expand their global operations by sharing vehicle platforms, components and modules, and tap into each other’s supply chain to run their business more efficiently. But as it turns out the deal is not working for GM, and PSA is looking for help elsewhere.
As you might have guessed, that elsewhere is China. PSA Peugeot Citroen is finalizing an alliance with Chinese automaker Dongfeng. They are promising the French automaker a 4.1 to $5.5 billion capital injection. GM would have never done that.