NEW YORK (Reuters) -- General Motors Co.'s partnership with PSA/Peugeot-Citroen would survive even if China's Dongfeng Motor takes a stake in the French automaker, GM Vice Chairman Steve Girsky said.
"We're not PSA's only partner so I don't think it would complicate our situation any more than it would complicate some of their other partners," Girsky said in New York on Friday, referring to a possible capital tie-up between PSA and Dongfeng.
GM's partnership with PSA is a key part of the U.S. automaker's plans to fix its ailing European operations.
PSA is considering selling a stake to its China joint-venture partner Dongfeng to raise cash for expansion outside Europe, people familiar with the matter told Bloomberg earlier this month.
The Peugeot family has also offered to give up control of PSA as it tries to revive plans for a closer tie-up with GM backed by a fresh capital injection, Reuters reported in June.
Girsky said the impact of a PSA-Dongfeng capital tie-up on GM's alliance with PSA would depend on how much influence Dongfeng had. He said another factor would be whether any vehicles in such a partnership would be sold in China, where GM's joint venture partner is SAIC Motor Corp.
GM has so far refused to invest more money in PSA, a stance Girsky reaffirmed. GM is PSA's second-largest shareholder behind the Peugeot family. "We bought our 7 percent in the first place not because we wanted significant influence in PSA, but because we wanted to help them with their capital raise at the time," he said.
Girsky said PSA has not raised the issue with GM and he declined to say whether the U.S. automaker would be willing to have its stake in PSA diluted. "We haven't had discussions. We don't know what they're going to do, and when they decide what they're going to do, they'll pick up the phone and call us."
Girsky said fixing GM's European operations is the priority and the alliance with PSA is meant to help. GM and PSA are still working together to build two minivan-like vehicles on the same vehicle platforms, starting in 2016, but other unidentified products largely for the European markets are also being discussed, he said.
GM's money-losing European unit has been a key focus for investors since the automaker went public in 2010 following a bankruptcy reorganization and a $49.5 billion U.S. government bailout. In November 2011, CEO Dan Akerson charged Girsky with overhauling the European operations, which have suffered 13 straight years of losses.
Girsky said the European automotive market, which hit 20-year lows earlier this year, has bottomed out, but GM is not expecting a huge industry volume recovery in the next year or two.
GM has taken costs out of its struggling Opel unit in Europe and made the commitment to spend $5.2 billion on the business by the end of 2016 to launch new models. Now, GM needs to focus on making the brand stronger, and Girsky said Opel was on pace for the first time in 15 years to avoid losing market share in the region.
Girsky said talks with the union representing workers at the Bochum, Germany, plant slated to close at the end of 2014, were ongoing, but declined to say when they would wrap up or what the cost to GM would be. GM spent $527 million in 2010 to close a plant in Antwerp, Belgium, that employed 2,600 people. The Bochum plant has 3,300 employees.
Girsky, who advised the UAW in talks with Chrysler CEO Sergio Marchionne during the company's 2009 bankruptcy, said he was a "fascinated bystander" watching the talks between the Chrysler boss and the UAW's retiree healthcare trust that owns a big stake in the U.S. carmaker.
Chrysler, 58.5 percent-owned by Fiat, filed paperwork late on Monday in a step toward the flotation of shares held by the UAW, which owns the rest of Chrysler through the trust.
Marchionne is proceeding with the initial public offering demanded by the union, after the two sides failed to agree on a buyout deal in more than a year of talks.
The UAW wants more than $5 billion for its stake, higher than what Marchionne has offered. Chrysler's IPO filing included a warning by Fiat that the Italian carmaker may reconsider the benefits of deeper ties with Chrysler.
"I think they'll reach an acceptable compromise," Girsky said of the talks. "This is the kind of thing that doesn't really resolve itself until the end because both sides have every interest to sort of push the other to see how far they can go."
Bloomberg contributed to this report