Why General Motors Company (GM) Won’t Buy Peugeot – Yet

When Peugeot and France get truly desperate, GM might deal

It’s also not hard to see that France would take a disproportionate share of the cuts. GM has already put one of Opel’s four German factories on a path to closure, despite stiff resistance from Opel’s powerful union and the German government. Closing a second plant in Germany isn’t likely to happen.

In other words, if GM were to absorb Peugeot, it’s reasonable to expect that the combined company would quickly make drastic workforce reductions in France. It’s also reasonable to assume that GM won’t consider moving in unless it’s clear that the French government and Peugeot’s unions won’t stand in the way of those reductions, and won’t insist on the massive severance packages that are common in Europe.

As of right now, that’s not the case. But as Peugeot continues to drain its cash, and the situation becomes more dire, things might change. Watch this space.

The article Why GM Won’t Buy Peugeot – Yet originally appeared on Fool.com and is written by John Rosevear.

Fool contributor John Rosevear owns shares of General Motors. Follow him on Twitter at @jrosevear. The Motley Fool recommends General Motors.

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