PSA Peugeot Citroen unions announced concerns last Friday over a deeper tie-up plan with General Motors (GA). According to sources, the French carmaker is seeking to revive the said plan. Analysts said that the move would require major capacity cuts. It could also face serious obstacles. However, discussions may signal that the companies are preparing to handle overcapacity.

The Paris based car manufacturer, General Motors and founding Peugeot family declined to comment on the Reuters report. The said report stated that the founding shareholder was ready to hand over control to GA for a new cash injection from the firm.

GM reiterated that it had no plans to invest more cash in Peugeot. According to sources, the French carmaker also explored an inconclusive deal with Dongfeng Motor Group. Dongfeng is General Motors' Chinese partner.

The alliance of GM and Peugeot last year made the companies plan to pool future vehicle programs.