Financial constraints had initiated plans to merge Opel with PSA Peugeot Citroen however, General Motors had other plans. The plans to merge these two auto majors which were announced at the beginning of November have been put on hold following an announcement released by General Motors to the media.
Sources reveal that the merger deal has been totally called off and instead the two auto makers would be looking towards a limited partnership in four specific areas which was announced in October as an alternative. The merger was to bring much relief to the financially strained auto manufacturers who would be combining their supply chains to ensure joint production of components which would go a long way in ensuring more economical means of production.
This situation has arisen due to eurozone debt crisis due to which manufacturers are facing piling stocks, low demand and heavy financial losses. Peugeot sales dipped 3.9% during third quarter and will be cutting over 8000 jobs. Likewise General Motors profits too crashed 12% in the third quarter of this financial year and will be cutting 2600 job by end of 2012.