BERLIN (Reuters) - PSA Peugeot Citroen has ruled out a merger with General Motors' Opel division as part of their alliance, Autogazette reported on Monday, citing a Peugeot manager.

"This has never been an issue during the discussions," the magazine quoted Olivier Dardart, head of the French carmaker's German operations as saying. "The point (of the alliance) is not to reduce personnel."

Since its announcement in February, the planned alliance between Peugeot and GM has drawn investor skepticism as the French automaker's finances worsen, prompting thousands of domestic job cuts under close supervision by Socialist President Francois Hollande's government.

The two manufacturers on Thursday scrapped plans for a joint mid-size car program, though signed agreements on three other vehicle projects and engine cooperation.

(Reporting by Andreas Cremer; Editing by Helen Massy-Beresford)