General Motors (NYSE: GM ) raised eyebrows around the world when news broke of its plan to purchase 7% of deeply troubled French automaker PSA Peugeot Citroen (NASDAQOTH: PEUGY ) . GM hoped to make Peugeot part of its plan to end years of losses at German GM subsidiary Opel, by sharing parts and eventually developing a series of new models together.
But Peugeot was in rough shape, battered by deep recessions that have driven Europe's new-car sales to 20-year lows. GM scaled back its plans, but it retains a stake in the troubled French automaker. Now, amid rumors that a Chinese suitor may step in with a big investment in Peugeot, GM is standing by its partner -- and making plans to share production of at least one new model.
In this video, Fool.com contributor John Rosevear explains what's up with Peugeot and its relationship with GM -- and why the French automaker's health should be on the minds of all GM investors.
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