French PM to meet Peugeot Citroen chief Varin today image

The head of French carmaker PSA Peugeot, Philippe Varin will meet French Prime Minister Jean-Marc Ayrault on Monday ahead of a government plan for the car sector due next week.

The meeting follows a decision by Europe’s second-largest carmaker to cut 8,000 jobs and close an assembly plant at Aulnay near Paris.

On the same time, Industry Minister Arnaud Montebourg is scheduled to see Peugeot chairman Thierry Peugeot on Thursday.

PSA Peugeot Citroen said in an interview with French daily Le Figaro that government criticism have weakened the French automaker and even left it vulnerable to hostile takeover bids.

“The attacks the company is currently facing have an immediate effect on (investor) perception. This is a dangerous situation,” Peugeot said.

“We are well aware of the seriousness of the plan to cut 8,000 jobs. These measures are painful, I understand they can cause shock within the company, the government and the whole of the country,” Peugeot chief said.

Varin said that the company had looked at reducing costs outside France but decided against cuts at its Trnava plant in Slovakia, where labour costs are much lower, or at its factory in Madrid, which is too small to have much impact.

French President Francois Hollande has called the move “unacceptable” and plans on July 25 to outline a program for the helping the car industry.

In a radio interview, Industry Minister Arnaud Montebourg said the aid will favor companies that are engaged in developing environmentally friendly and innovative vehicles, for which the two French manufacturers, PSA Peugeot Citroen and Renault SA have been investing heavily.