French Government: PSA Officially In A Tough Spot
It’s official. France’s PSA Peugeot Citroen is “in a difficult situation,” says a government-commissioned report into PSA’s financial situation. The report comes to the conclusion, says Reuters, that the company cannot be saved by cost cutting alone, and that ”job cuts must not hurt its research and development capabilities.” While the report does not make recommendations on how else the company is to be saved, it pretty much smells like bailout à la française.
“This study has shown that PSA is currently in a difficult situation, resulting both from economic and structural reasons,” says the report. It doesn’t let off PSA completely scot free, though. The company “should have considered its overall production capacity before deciding to close its Aulnay plant,” whatever that means.
The report, written by mining engineer Emmanuel Sartorius for France’s “Minister of Productive Recovery,” Arnaud Montebourg, says that “ PSA must urgently address the situation,” but chides the company for having been too hasty in closing some of its plants. The report comes to the conclusion that “a restructuring is inevitable.”
PSA is 7 percent owned by GM. The alliance was sharply criticized by Montebourg, a nd there have been on-going rumors that it may be unraveling before getting going.
Bertel Schmitt comes back to journalism after taking a 35 year break in advertising and marketing. He ran and owned advertising agencies in Duesseldorf, Germany, and New York City. Volkswagen A.G. was Bertel's most important corporate account. Schmitt's advertising and marketing career touched many corners of the industry with a special focus on automotive products and services. Since 2004, he lives in Japan and China with his wife <a href="http://www.tomokoandbertel.com"> Tomoko </a>. Bertel Schmitt is a founding board member of the <a href="http://www.offshoresuperseries.com"> Offshore Super Series </a>, an American offshore powerboat racing organization. He is co-owner of the racing team Typhoon.
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Funny how once you take office things change. “should have considered its overall production capacity before deciding to close its Aulnay plant,” You are correct, what does that mean. PSA has over capacity, so it closes one down. Maybe it has something to do with GM and making Peugeots in a GM plant when they could be making them in a plant they closed down?
Funny how once you take office things change. “should have considered its overall production capacity before deciding to close its Aulnay plant,” Was just going to say the same thing, they have over-capacity, they close a plant, the government investigating companies financial health admits they have problems, that are structural (i.e. over-capacity) and then faults the company for addressing a structural problem as part of the problem? Sounds like a warning to Renault if anything, as I said the other day (and Bertel and others would know better than me), EU rules largely restrict/limit what countries can do for their companies.
We're in a tight spot boys. Cue the French bluegrass music
Bertel, are you too lazy to read the whole report? Or are you only interested in headlines that inflame uneducated American readers?