PSA Peugeot Citroen denies seeking government loans image

French weekly La Tribune today reported that French carmaker PSA Peugeot Citroen is seeking an emergency loan from the French government, as the automaker is having deep problems.

However the company denied the report this morning.

“PSA and [CEO] Philippe Varin deny having asked for a loan from the state,” company spokesman Pierre-Olivier Salmon said.

This comes after Reuters reported last week that the France’s Socialist government is studying the possibility of providing further state aid to its struggling automobile sector.

Global sales fell to 1.62 million cars and delivery trucks in the first six months from 1.86 million in the same period a year earlier, Europe’s second-largest automaker said in a statement on Friday.

The Peugeot and Citron brands’ traditionally strong markets, France, Spain and Italy, are in profound crisis,” the company said. European sales plunged 15 percent.
A leader of the Force Ouvrier labour union said Peugeot’s management would propose cutting 8,000-10,000 posts via a combination of reassignments, voluntary departures and forced redundancies.

Peugeot is expected to present the new cost-cutting measures at an extraordinary meeting with unions on July 12, with another scheduled for July 25.
There has been widespread speculation it may close its historic factory in the northern Paris suburb of Aulnay-sous-Bois, which employs about 3,300 people.

Peugeot’s situation has deteriorated since last year, when the core autos division swung to a loss, punished by the company’s exposure to France and other European markets badly hit by the region’s debt crisis.