France: No aid for Peugeot without concessions – minister image

PSA Peugeot Citroen, the larger and more financially distressed of France’s two carmakers, is heading for a big first-half loss, loosing €200m of cash a month.

But France will not grant any public aid to Peugeot PSA without concessions from the carmaker, Industry Minister Arnaud Montebourg said on Wednesday.

Montebourg said he will meet with members of family that controls PSA to discuss the company’s sweeping cost-saving plan unveiled last week that will entail some 8,000 job cuts and the closure of an assembly plant north of Paris.

“I want to see where they’re going, what they want to do,” he said.

Montebourg did not detail what concessions would be required, but has hinted that companies requesting aid from the state may have to forego issuing dividends to shareholders.

In an interview on Saturday, President Francois Hollande said that the plan was “not acceptable” and would have to be renegotiated.

The closure of Aulnay is the first in the automotive industry in France for 20 years.
Philippe Julien, the CGT union secretary at the plant, said:

“We were still not given a reason for the closure of this site, which has a modern, well-situated factory with access to the airport, railway and motorway as well as its proximity to Paris in the north-south axis. There is no reason to close this plant, we make the C3, which is the best-selling car of the group and the one that pulls all the sales in right now and we’ve still got 450,000 cars to make according to management, so that production could take us into 2016 at least.”

The automaker plans to detail its restructuring program with its July 25 release of corporate results, French newspaper Les Echos reported on its website late Tuesday, citing an interview with Chief Financial Officer Jean-Baptiste de Chatillon.