PSA Peugeot Citroen announced it will name French state and trade union representatives to its board to get government aid.
Prime Minister Jean-Marc Ayrault also said he had requested PSA Peugeot Citroen’s CEO Philippe Varin to find another restructuring plan, eliminating the 8, 000 job cuts. The French government said it would help Peugeot’s lending arm, Banque PSA Finance, only if its agrees to cancel the planned job cuts and the closing of the plant near Paris, and also to name a government and labor union representatives on its board.
Banque PSA Finance, which funds PSA Peugeot Citroen’s car loans and dealers, is about to be downgraded by the Moody’s to the junk status. If the automaker agrees with the terms, the government will offer a support package which includes a state loan guarantee and postponed repayments on some bank debt.
“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.”
The government is ready to offer between 5 and 7 billion euro in financial guarantees for the company, if Peugeot accepts the imposed conditions.