A Peugeot factory in France may soon be making the Opel Zafira minivan for GM. Photo credit: General Motors Co.
General Motors (GM 5.06%) raised eyebrows around the world when news broke of its plan to purchase 7% of deeply troubled French automaker PSA Peugeot Citroen (PUGOY). 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.
