The French government is denying that it plans to acquire a stake in PSA, but France’s Prime Minister told reporters that mechanisms for providing government assistance have already been vetted.
At a time of high unemployment and factory closures across France, the fate of PSA is a sensitive one. PSA’s sales have been tanking, hampered by an uncompetitive product line, falling car sales in Europe and a lack of low-cost product to compete in emerging markets.
Peugeot has already cut 8,00 jobs in the country as part of its plan to break even by 2014. But the company’s losses, estimated at 200 million euros a month. Amid an announcement of a $5.53 billion writedown, French politicians began going on the offensive regarding PSA, with the country’s budget minister declaring that ”Let’s be clear: this company cannot, must not disappear”.
French PM Jean-Marc Ayrault told Reuters that a more detailed plan had already been drawn up, while simultaneously denying that any action would be taken at this point
“We do have a tool, the FSI (France’s sovereign-wealth fund), which can if necessary take a stake. But today this question is not being looked at,”
Ironically, Peugeot, unlike its rival Renault, is entirely owned by private actors, while the French government owns a 15 percent stake in Renault. But that could change quickly given the way things are progressing.