La Tribune: Splitsville At BMW And PSA

Bertel Schmitt
by Bertel Schmitt
la tribune splitsville at bmw and psa

Turmoil at GM’s new European partner PSA Peugeot Citroen. As if rumors of embargo-busting and of an impending guillotining of CEO Philippe Varin aren’t enough, now there are reports that BMW wants out of the hybrid alliance with PSA.

“Divorce announced between BMW and PSA,” France’s La Tribune reports a bit hastily. The paper says BMW wants out because it does not appreciate PSA’s alliance with GM, and because the Bavarians are worried about PSA’s financial stability. Reportedly, BMW wants to buy some or all of PSA’s stake in the joint venture.

Whereas PSA’s supervisory board rushed to Varin’s defense, saying that he has the board’s full confidence (it always makes an executive’s blood curl when that happens,) the statements regarding the divorce are much less forceful.

A PSA spokesman told Reuters: “We are examining the impact of our alliance with GM on the joint venture…It’s clear the alliance changes the conditions of our partnership.”

BMW told Reuters that the conditions of the joint venture have changed since General Motors became PSA’s second-largest shareholder with a 7 percent stake. For the time being, BMW is still “sticking with the venture.”

La Tribune’s sources say to expect an announcement within a few days.

P.S.: BMW was heard of, and its comments are indicative of what BMW thinks the joint venture is still worth:

“We are discussing conditions for the exit of PSA but we will not make any payments,” a BMW spokesman told Reuters.

Join the conversation
  • CJinSD CJinSD on Jun 21, 2012

    Does this mean an end of 'Prince' engine sharing? PSA has been building engines for BMW's use in the Mini Cooper since 2007 and 1-series since 2011. Does BMW have a new small displacement 4 cylinder of their own?

  • Oelmotor Oelmotor on Jun 22, 2012

    hmmmm...Toyota and BMW are exchanging hybrid and diesel engine technology. Perhaps BMW will use small motors from Toyota too.

  • Dcars Dcars on Jun 22, 2012

    So the English Mini has French engine in a German Engineered car? That's a great motor. PSA seems like it has great products but has money problems. GM should take a bigger stake in the company if BMW drops out.

  • Rnc Rnc on Jun 22, 2012

    Yes PSA has great engines (and I'm sure transmissions, unless they outsource), any company wanting to seriously compete in europe has to (fuel prices and all), PSA's biggest problem is that thier designs are about as quirky, ugly and (some)cases impractable as can be in comparison to what VW and Ford offer(finally got cable again after 5 years of unplugging) and watching top gear, every PSA car they've tested looks like ass with functionallity that would make me want to keep a hose in the trunk so I could deal with it after realizing what I had bought, outside of french loyalty, PSA wouldn't exist. Thier best bet, merge with Mazda (which is dead (in matter of time) without Ford (however I don't know if that would be posible with GM's ownership stake in PSA, and Ford's in Mazda (along with the technology sharing agreements). GM's and Ford's new six speed transmissions was co-developed, GM approached Ford because it couldn't afford to develop it, Ford compared to thier design, decided GM's was better and paid for the development (From R&D through PPAP up to production status). One of GM's biggest problems was that it couldn't afford the new heat treatment technology needed to make the required tolerances (thier 50's oil/salt and 70's induction stuff wouldn't cut it), so they outsourced the heat treating (this is how I know this, like most companies that go into bankruptcy, they know they're bankrupt years before it happens, GM's final business plan before the great recession, was to just try and tread water for 10 more years when the million or so retirees and such they are supporting would begin to die in mass and money freed could be used to rebuild, just hopefully not in the Jack Smith mold again), while Ford could afford the tech and kept the whole process in house. Ford's not going to want Mazda to give PSA, what it gave Mazda, so PSA can give it to GM (and before the mazda train starts, remember the only times in the last 20-30 years they have made money is when a Ford exec was the CEO)