The French government will offer PSA Peugeot Citroen a lending bailout if it guarantees plants and reduces job cuts.
Last week French Finance Ministry and national banks were trying to find solutions to rescue Banque PSA Finance, which is under the threat of being downgraded to junk status. After Moody’s downgraded PSA three months ago, now it is reviewing BPF for a possible downgrade.
Industry Minister Arnaud Montebourg said that the government will offer PSA Peugeot Citroen the lending bailout only if it agrees to appoint worker and government representatives, guarantee the future of French facilities and cancel hundreds of planned job cuts in the country. Peugeot is considering accepting a state-backed rescue for its Banque PSA Finance, the automaker’s landing arm.
“I want workers to sit on the supervisory board, to bring more balance to strategic decisions,” Montebourg was quoted as saying. “I also want an independent administrator on the board to liaise with the government.”
In July Peugeot announced its plans to close a plant near Paris and cut 8,000 more jobs. Compared with domestic rival Renault, in which the government has a 15% holding and two board seats, Peugeot has no strings attached to the government.