Peugeot Looking to Transfer Administrative Rights to General Motors
|   Wednesday, August 14, 2013
Peugeot is thinking about letting General Motors step in and take charge of the business which is on the verge of declining. Citroen Peugeot run PSA could be on the verge of a major economic downfall as reports claim. The rumors put the estimated deadline to December 2013, post which there is a slim chance of the partnership surviving. Peugeot's claim of taking a back step has further fuelled this controversy although none of the authorities were available for comment.


Reports also claim that if General Motors took over PSA, factories and organizations based out of Germany and France could be foreclosed as they are less profitable. However, the French Government is not likely to comply as Peugeot is a French organization and scrapping production in its home country could result in chaos and recession in the home economy.

Peugeot is also rumored to have filed for loans but is yet to find a willing supported for the cause. This lack of enthusiasm from bidders has reportedly forced the company to look up to General Motors. GM owns seven percent in the total PSA range and their support is extremely necessary if PSA wants to survive in this tough market condition. Dongfeng Motor Group tried a similar selling procedure by attracting bidders but the process failed miserably as well.

Peugeot owns close to 25.4 in the total market share although voting rights of 38.1 percent has been given to the authorities. The Peugeot Family has accepted the fact that they are tangled up in a very bad condition and help from General Motors is the only way respite available at the moment. General Motors on the other hand are willing to help only if they get administrative rights on the group.

This has led to a very sticky situation for the Peugeot Family as they are stuck in the middle of a cold war between the French Government and business house General Motors while their reputation, pride and money is on the stake. General Motors plan on merging the production of Opel and Peugeot and this would help both brands in establishing themselves in the market.

The French Government is helping Peugeot with financial aid ever since General Motors bought the seven percent stake in the company on February 2012. This means that Peugeot had the ability to make financial transactions and investments until recently when the grant was reduced. This has created extreme pressure on the PSA partnership which is ultimately taking its toll on the French economy.

General Motors on the other hand is in no mood for making adjustments and want administrative rights and assurance of tax benefits from the Government so that they can sell vehicles while making a profit. However, the French Government is reported to have asked General Motors to own a larger stake in the company if they want administrative rights. This means General Motors will have to make another investment in this already faltering company which the authorities are least likely to make.
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