May 10, 2012 / 10:24 PM / in 7 years

GM-Peugeot to pool mid-sized cars, compacts: report

FRANKFURT (Reuters) - General Motors (GM.N) plans to build mid-sized cars for PSA Peugeot Citroen (PEUP.PA), while the French automaker will assemble a compact model for GM’s Opel brand as part of their new alliance, according to press reports on Thursday.

Under current plans, GM would build a replacement for the Citroen C5 mid-sized sedan, the Paris-based company’s Rennes factory chief Jean-Luc Perrard told regional newspaper Ouest France.

Peugeot also plans to assemble GM’s next Opel Zafira compact minivan, leading to hundreds of job cuts at the company’s development centre in Ruesselsheim, German magazine Der Spiegel separately reported on Thursday, citing union sources.

Peugeot Chief Executive Philippe Varin said in March that the core of the alliance plan would see future Peugeot mid-sized cars built on the U.S. automaker’s platforms, and smaller GM models based on Peugeot vehicles.

Opel denied that the alliance with Peugeot would prompt job cuts at the Opel development unit.

“No jobs will be lost in the Opel technical development centre, however joint projects are divvied up concretely in the end,” Chief Executive Karl-Friedrich Stracke said in a statement. ($1 = 0.7716 euros)

Reporting by Christiaan Hetzner; Editing by James Jukwey and Phil Berlowitz

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