You all know about GM and PSA Peugeot-Citroen partnership, established a few months ago. Back then, the understanding looked as solid as rock, but now it looks like butter. Acording to high-placed sources, General Motors and PSA have reached a point where they decided to stop the project of a joint-veture, consisting Opel and Peugeot.
French carmaker’s worsening finances and government-backed bailout are the main reasons. Exploring a full combination of Peugeot with GM’s European unit Opel suddenly becomes a bad idea. The government bailout is sabotaging the plan, so the automakers have agreed to a pause in early-stage talks for the deal.
The government bailout conditions rule out French job cuts, which means a deal can’t happen any faster. The reason? It would be impossible to have all the cuts falling only on the Opel side. An imminent tie-up would have required deeper plant and workforce cuts on both sides.

Currently, Peugeot losses 160 million euros a month, while GM predicts a 1.4 billion euros loss for its Opel brand

Source: Peugeot