GM: 'No intention' of investing more cash in Peugeot

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Thread: GM: 'No intention' of investing more cash in Peugeot

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    GMI Canada Editor Premium Member ne_one's Avatar
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    GM: 'No intention' of investing more cash in Peugeot

    GM: 'No intention' of investing more cash in Peugeot
    Automotive News
    February 14, 2013

    General Motors is "not betting on" an uptick in European auto demand later this year and has no plans to provide additional funds to its struggling partner in the region, France's PSA Peugeot Citroen, GM's CFO said Thursday.

    "We have no intention of putting more cash into Peugeot," GM CFO Dan Ammann told reporters on Thursday during a briefing for the company's fourth-quarter results.

    GM booked a $220 million charge to fourth-quarter earnings to reduce the value of its about 7-percent stake in PSA to fair market value after the French company this week reported a $6.74 billion annual loss for 2012. It is PSA's biggest loss ever.

    GM CEO Dan Akerson on Thursday described relations with PSA Peugeot Citroen as good.

    GM acquired a 7 percent stake in PSA in March 2012 as part of a budding alliance but warned in August it may have to write down the investment as the European auto market weakens.

    Full article at link.

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    Re: GM: 'No intention' of investing more cash in Peugeot

    Europe has a boat load of money problems to start with so now is not the time to be investing.

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    Re: GM: 'No intention' of investing more cash in Peugeot

    Man, just another one of GM's "WTF were they thinking" moves.

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    Re: GM: 'No intention' of investing more cash in Peugeot

    Quote Originally Posted by usa1 View Post
    Man, just another one of GM's "WTF were they thinking" moves.
    Absolutely. GM at its core has been a collection of bad decisions. A company that was once so great it commanded about half the u.s. auto sales. To this day still produces some of the biggest wtf moments in automotive history. Look no further than the Fiat tie up and compare it to this marriage. GM appears to be a butter face car company who hooks up with anybody that's still standing after the bar closes.

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    Re: GM: 'No intention' of investing more cash in Peugeot

    Sounds like GM's investment in Fiat where they had to write down the investment and then eventually extorted a billion or so from GM. Hopefully GM has some kind of legal protection from similar extortion from the French.

    But don't forget everyone, this is just a paper loss. It only becomes real money if GM actually sells the shares. Otherwise the value of the partnership is still there - cost savings of shared purchasing and shared chassis, etc.

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    Re: GM: 'No intention' of investing more cash in Peugeot

    Quote Originally Posted by ne_one View Post
    [B][SIZE=4]"We have no intention of putting more cash into Peugeot," GM CFO Dan Ammann told reporters
    Mr. Ammann, the real question is why you put any cash into PSA at all in the first place.
    "The irony of the Information Age is that it has given new respectability to uninformed opinion" -- John Lawton

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    Re: GM: 'No intention' of investing more cash in Peugeot

    Come on guys, its going to be different this time! We got smart people running GM now!
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    Re: GM: 'No intention' of investing more cash in Peugeot

    Hm-m-m-m, sounds like somebody in Finance finally remembered the phrase: "...good money, after bad [money]..." (wink,wink)?
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    Re: GM: 'No intention' of investing more cash in Peugeot

    Are the same people responsible for the decision to pay Fiat to leave also responsible for the decision to welcome PSA with open arms?

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    Re: GM: 'No intention' of investing more cash in Peugeot

    "No intention"

    Now there's some weasel words.

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    Re: GM: 'No intention' of investing more cash in Peugeot

    A GM/VW alliance would be a very powerful and interesting alliance.

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    Re: GM: 'No intention' of investing more cash in Peugeot

    All is not lost. The upside of joint platforms is HUGE!! for GM. But for now it looks like a bad decision.

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    Re: GM: 'No intention' of investing more cash in Peugeot

    Quote Originally Posted by emh View Post
    Mr. Ammann, the real question is why you put any cash into PSA at all in the first place.
    Rats. You beat me to it.
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    Re: GM: 'No intention' of investing more cash in Peugeot

    Peugeot lost over 6 billion last year. GM was stepping in until the French government did with even deeper pockets.

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    Re: GM: 'No intention' of investing more cash in Peugeot

    Quote Originally Posted by LetsRace View Post
    A GM/VW alliance would be a very powerful and interesting alliance.
    VW doesn't team up, they acquire.

    Quote Originally Posted by mchicha View Post
    All is not lost. The upside of joint platforms is HUGE!! for GM. But for now it looks like a bad decision.
    Exactly. PSA has to remain solvent for this deal to work out for GM.

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