GM recently announced it does not plan to make further investments in its struggling partner PSA Peugeot Citroen.
“We don’t have any intention of investing additional funds into PSA at this time,” Chief Executive Officer Dan Akerson told a media briefing in Shanghai. “If we see something changes, we’ll evaluate that.”
Peugeot, which plans to cut 8,000 jobs in France and close a plant near Paris, will have to raise funds through a share sale as it continues to burn cash in a market which shows no sign of recovery. GM, currently owns 7% of Peugeot and in February the two automakers signed a broad-based alliance and GM wrote down almost half of its $423 million investment in the car maker.
“One of the premises of the alliance was, we’ve got to fix our problem, and we’ve addressed it, and continue to make progress,” Akerson said. “They have to address their issues and I think they’re doing that as well.”
In February GM said it expects sluggish demand in Europe this year and that it will make no further investments in its struggling partner PSA Peugeot Citroen. Last year the two companies revealed their alliance aimed at cutting European losses and sharing development costs.