Peugeot Rules Out Merger With Opel image

Autogazette reported today, December 24th that PSA Peugeot Citroen has ruled out plans to merge with GM’s Opel division.

“This has never been an issue during the discussions,” the magazine quoted Olivier Dardart, head of the French carmaker’s German operations as saying. “The point (of the alliance) is not to reduce personnel.”

The alliance between Peugeot and GM has been announced in February and since then it has drawn investors’ skepticism related to the French automaker’s worse finances. Recently Peugeot announced it will lay off 1,500 employees by 2014 as sales continue to drop in Europe. The automaker will also close a plant near Paris, negotiate a strategic partnership with GM to cut costs and sell part of its assets.

Last week the two automakers announced they are giving up plans to manufacture a large car, and will focus instead on three smaller models. Peugeot and GM will also jointly produce a new generation of small gasoline engines and also focus on “product and industrial initiatives in Latin America or other growth markets.”

Although the companies planned to manufacture two small cars, a compact crossover and a larger vehicle, only the compact cars received the approval.