By on September 11, 2012

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, and there have been on-going rumors that it may be unraveling before getting going.

Get the latest TTAC e-Newsletter!

10 Comments on “French Government: PSA Officially In A Tough Spot...”

  • avatar

    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?

    • 0 avatar

      “what does that mean”

      I haven’t read this particular report, but reports like these are often used to deliver bad news that can’t be articulated directly by whoever wants to deliver it.

      As far as I can tell, the basic punch line is that PSA needs to be married off to someone else, and that one should expect cuts to result from such a marriage. This is stuff that the unions don’t want to hear.

      The comment about Aulnay is fairly gratuitous. It’s a half-hearted condemnation without any meat behind it. It’s just a polite way of saying that the decision to close the plant is not going to be reversed, but we still get to sneer about it, anyway.

    • 0 avatar
      Adrian Roman

      “should have considered its overall production capacity before deciding to close its Aulnay plant,”

      This is somehow a vailed pointing at the fact that Peugeot should have closed its plant in Spain, near Madrid, which is older and less efficient than the Aulnay site.

      Of course they (French Govt report) can’t say it outloud, as this would be against EU principles (i.e. a protectionist, nationalistic statement)

  • avatar

    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.

    • 0 avatar
      The Doctor

      EU law didn’t stop the French government classifying Danone as “strategically important” in order to protect it from takeover when PepsiCo was sniffing around it. If the French view yoghurt as being of national importance, think how they view cars.

      • 0 avatar

        Doubt Germany and Italy had little worries over yogurt production/ownership, automobiles will be a whole different game.

        Bertel – Can the French government buy shares or debt in PSA or would some EU rules disallow? Or will PSA be the start of government refills, followed by renault and fiat (both with agreements, even if under the table, to keep under utilized and/or inefficient factories open, leaving the same structural problems) and Opel the one left to die.

        Fiat has options at least, factories in US, with exchange rates, would actually be profitable for them.

      • 0 avatar

        well to be fair their yogurt is much better than their cars, and if the gov wants to bail out them out who are we americians to call them out for that as we did it for 2 of the big three

  • avatar
    el scotto

    We’re in a tight spot boys. Cue the French bluegrass music

  • avatar

    Bertel, are you too lazy to read the whole report? Or are you only interested in headlines that inflame uneducated American readers?

    • 0 avatar

      I take exception to that remark. We uneducated American readers don’t need no headlines to get inflamed. We can do it at the drop of a hat, with no prompting necessary.

Read all comments

Back to TopLeave a Reply

You must be logged in to post a comment.

Recent Comments

  • 96redse5sp: Lol at “re-education program”. Matt Posky can’t help himself. He has to bring politics into all his...
  • DrivenToMadness: I’m in the automotive semiconductor business and I can assure you the supply problem is NOT...
  • Al: I need to grab those doors for my Sbarro Windhound!
  • SnarkIsMyDefault: Norm, Naked or S model? And what’s your old SVRider name? (Not to go off topic or...
  • Lightspeed: I fell in love with these when I visited Ankara and Istanbul and went for a lot of harrowing cab rides in...

New Car Research

Get a Free Dealer Quote

Who We Are

  • Adam Tonge
  • Bozi Tatarevic
  • Corey Lewis
  • Mark Baruth
  • Ronnie Schreiber