GM: 'No intention' of investing more cash in Peugeot
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GM paid about $400 million for a 7-percent stake in PSA in 2012. |
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DETROIT (Reuters) -- General Motors is "not betting on" an uptick in European auto demand later this year and has no plans to provide additional funds to its struggling partner in the region, France's PSA Peugeot Citroen, GM's CFO said Thursday.
"We have no intention of putting more cash into Peugeot," GM CFO Dan Ammann told reporters on Thursday during a briefing for the company's fourth-quarter results.
GM booked a $220 million charge to fourth-quarter earnings to reduce the value of its about 7-percent stake in PSA to fair market value after the French company this week reported a $6.74 billion annual loss for 2012. It is PSA's biggest loss ever.
GM CEO Dan Akerson on Thursday described relations with PSA Peugeot Citroen as good.
GM acquired a 7 percent stake in PSA in March 2012 as part of a budding alliance but warned in August it may have to write down the investment as the European auto market weakens.
At the time, GM said it planned to hold the investment until the value recovers.
GM paid about $400 million for the shares last year.
Ammann also said today the company does not expect to make mandatory contributions to its U.S. qualified pension plans for at least five years, and has no current plans to make contributions this year.
"GM's strategy of not funding this year does free up its cash deployment options, though it's possible GM may be opting to reserve cash for any future hourly de-risking actions," Citibank analyst Itay Michaeli said in a research note Thursday.
GM's U.S. pension obligations were underfunded by an estimated $13.1 billion at the end of 2012, Citibank said.
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