4:17 pm
Wed February 29, 2012

GM forms alliance with Peugeot to stem Europe losses

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.