GM forms alliance with Peugeot to stem Europe losses

Feb 29, 2012

General Motors is forming an alliance with French carmaker Peugeot to help the company make progress in getting to a breakeven point in Europe. 

GM made a record profit last year, but it was no thanks to Europe, where the company lost $700 million.  

The limited alliance with Peugeot will involve the joint development of some car platforms and joint parts purchasing. 

The companies estimate it will save a total $2 billion within a few years.

GM CEO Dan Akerson says the two companies will continue to compete in other areas.

"So we have our self-interest at heart and we have our joint interest at the center of it as well."

GM will gain a 7% stake in Peugeot. 

Both companies will still have to separately deal with the biggest problem in the European car market.  That’s too many workers and factories compared to demand.