France’s industry minister, Arnaud Montebourg, revealed that the country is appealing to PSA/Peugeot-Citroen to name government and worker representatives to its board, lessen job cuts and ensure that plants return for a lending bailout. When interviewed by French newspaper Liberation, Montebourg said that the automaker has to throw out plans to cut hundreds of jobs and guarantee the survival of domestic plants.
PSA is considering a state-supported rescue plan for Banque PSA Finance (BPF), its lending arm that funds Peugeot and Citroen dealers and car loans. Montebourg had already cautioned that any assistance will come with conditions, which he discussed lightly. He said that he wants to have more balance with the strategic decisions, a goal that he hopes to accomplish by putting more workers on the supervisory board.
He also hopes there will be an independent administrator on the board to mediate with the government. He also promised to look into the consequences of PSA's alliance with General Motors.
He explained that the government wants PSA to commit to preserve all of its French plants so the type of restructuring plan revealed in July does not repeat itself. The French state holds a 15% share in Renault but has no stake in PSA.
To reduce its losses, it is cutting 8,000 jobs and shutting a factory at Aulnay near Paris that produces the Citroen C3.
A government source told Les Echos that the automaker may require the support of the state for BPF, its car loans arm, as early as this week since the announcement of the group's quarterly sales on Wednesday may set off debt rating downgrades.
The latest downgrades to the credit rating of PSA threaten to bring down BPF to junk status, widening even more the competitiveness gap with automakers like Volkswagen by making its car loans costlier.