PSA Peugeot Citroen appointed a senior government adviser and former head of EADS to its supervisory board.
Europe’s second-largest carmaker accepted the appointment in exchange for a state-backed bailout. The Peugeot board agreed to submit the nomination of Louis Gallois to the annual shareholder meeting in April, the company announced on Tuesday.
A senior economic adviser to President Francois Hollande’s government, Louis Gallois is also former chief executive of European Aeronautic Defence & Space Company (EADS) and state-owned SNCF railway company. Gallois is an adept of slashing payroll taxes to improve French competitiveness, a measure fully-supported by PSA Peugeot Citroen and Renault.
Peugeot was forced to seek a state-backed rescue for its Banque PSA financing arm after its borrowing costs were hit by a series of credit downgrades. In return for an 18.5 billion euro package including up to 7 billion in state loan guarantees, Peugeot agreed in October to appoint a government-nominated board representative.
Peugeot is one of the carmakers worst hit by the sales plunge in southern European markets affected by austerity measures. In July, the carmaker announced plans to scrap 8,500 jobs and a major assembly plant, drawing heavy critics from France’s socialist government.