Peugeot (OTCPK:PEUGY) and General Motors (GM -1.8%) have halted talks on closer ties, after Peugeot accepted a French government guarantee for its lending arm and announced further deterioration of its cash position. The decision to shelve a deeper tie-up may bring about heightened scrutiny of the existing alliance plan, which is already being questioned by many investors due to the French automakers weakened state.