GM, Peugeot mulling European alliance

With General Motors Canada Ltd. reportedly facing a $2.2 billion shortfall to meet pension obligations, its parent company, General Motors Co., is considering a merger with Peugeot in Europe to save money on manufacturing. PSA Peugeot Citroen is Europe’s second largest auto maker, while GM is the world’s largest. The two behemoths are considering a manufacturing alliance, reportsThe Globe and Mail, to save money by sharing vehicles and parts. The deal would be part of Peugeot’s “globalization strategy.” Like GM, Peugeot is also suffering steep losses in Europe, where consumer demand is sluggish. The company’s stock has dived by 50 per cent in only 12 months.