General Motors! Meet Peugeot: Another meet, yet another mystery to unravel in the coming years – Part 2

The goals were similar to those stated for the current linkup: sharing technologies, reducing fixed costs, economies of scale in purchasing, and access to a broader product portfolio. Some of it actually happened: Suzuki provided the Chevy “Tracker” small SUV and other low-end products; Isuzu shipped medium-commercial, city-delivery trucks under the Chevrolet and GMC badges; Fiat gave GM access to passenger-car diesel engines, (an area of woeful neglect in GM Europe’s own product plan), as well as some purchasing savings.

GM however, are not giving up on friendships. In the recent development in news, the company has now joint hands with French carmakers, Peugeot. Will this new alliance work? Only time will tell. However, there are some aspects that need to be addressed before embarking on the joint venture.

For this alliance to work and produce actual benefits, an unrelenting senior-level focus is required, forcing timely “Plan A or Plan B” decisions on a pair of reluctant organizations. It’s actually worth the full-time effort of one senior officer from each company, meeting daily and forcing decisions. Absent the senior management spurs, each company will participate in endless “joint study groups” which will periodically report to a “Joint Steering Committee”, which will urge “timely” resolution of undecided issues. Meanwhile, both organizations will feel a bit less threatened by the battering seas of the market forces: after all, we’re lashed to another vessel now! How could the storm sink us both?

From ‘The Street’s’ point of view, the alliance is the best way to infiltrate deeper into the European market. The French company will also have a cushion to evade recent crisis in the region. The joint venture can also produce some new technologies and models following them. However, the conflict of interest here is that French believe in front wheel drive and GM still is stuck on prolific powers of the rear wheel drive; if you are getting what I mean.

Therefore, as it is with every merger and alliance, only time can tell what will happen of these two companies?

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Posted by Usman Khalid on Mar 7 2012. Filed under Automobiles. You can follow any responses to this entry through the RSS 2.0. You can skip to the end and leave a response. Pinging is currently not allowed.