Ford and Renault expressed concern over French aid to PSA

Article by Anita Panait, on October 27, 2012

Ford Motor Co. and Renault have joined the German state of Lower Saxony, Volkswagen's second largest stakeholder, in raising alarm over a EUR7 billion ($9.1 billion) loan for PSA/Peugeot-Citroen guaranteed by the French government. The carmakers voiced concerns that the French government loan guarantee for PSA's troubled car-loans division will give PSA an unfair advantage in Europe's dwindling vehicle market.

Stephen Odell, chief executive of Ford of Europe CEO, disclosed that there were questions among some carmakers over the legality of PSA's refinancing deal. Odell remarked that it is not sustainable for government support to keep competitive companies going forward, particularly in a protracted downsized economy.

Ford is shutting down its vehicle plants in Genk, Belgium, and Southampton, England, vehicle plants, and its stamping factory in Dagenham near London, to help its European operations return to profitability by 2015. Ford expects to post over $1.5 billion in losses in Europe in 2012 and a similar amount in 2013. Meanwhile, Renault Chief Financial Officer Dominique Thorman said the carmaker will pay "close attention" to state support for PSA.

Renault wants to ensure that the rescue package does not give PSA unfair advantages. Thorman remarked that once Renault understands the details of the refinancing scheme for PSA, its interest is to ensure that there would not be any distortion of competition.

The French government holds a 15-percent share in Renault. On Tuesday, Lower Saxony expressed opposition to the French government refinancing for PSA. Lower Saxony indicated that the German government would ask for a European Commission review. European Union rules do not allow member countries to provide state aid to local companies, which give them an unfair advantage over rivals in other EU countries.

Topics: ford, renault, psa

If you liked the article, share on:

Pin It

Comments

Recommended

Top Gear has revealed that for its “Stars in a Reasonably Fast Car” segment, it will now be using a slightly enhanced Toyota GT86, which in the U.S. market is...
by - March 24, 2017
Porsche is laying aside any plans of pushing another hybrid hypercar into their line-up -- at least not at this time. Oliver Blume, Porsche Global Chief confirmed in a recent...
by - March 24, 2017
Since 1993, Lexus has produced 4 generations of the Lexus GS, with the GS F amongst its newest member of the family. Unfortunately, rumors are also heating up that the...
by - March 24, 2017
In a leaked image following a presentation held in China, we learned that Czech automobile manufacturer Skoda will soon unveil 2 more new SUVs in China, resulting in a four-model...
by - March 24, 2017
McLaren is said to be designing the next generation of Sports Series, which could include a V6 hybrid among its powertrain options. It was earlier reported that the British automaker...
by - March 24, 2017
Facebook

Youtube Channel

Tip Us
Do you have a tip for us?
Did you film an important event?
Contact us
Newsletter
Subscribe to our newsletter!
Subscribe
Galleries