By on February 15, 2013

Despite a plan for a financial turnaround by 2015, PSA projected a cash burn rate as much as 1.5 billion euros  for 2013. Meanwhile, PSA’s finance arm had their bonds downgraded to junk status.

The downgrading of Banque PSA’s bonds by Standard & Poor’s is yet another blow for the French automaker, which reported record losses this week. One positive development for PSA was a labor agreement with workers at the troubled Aulnay plant, which allowed PSA to start winding down production ahead of schedule.

Meanwhile, French paper La Tribune shed some more light on PSA’s new brand strategy going forward. Initial reports suggested that Peugeot would move upscale, with Citroen remaining in its current place, but La Tribune now claims that

Citroën and should move at least partially to models simpler, more affordable, while its DS range must occupy the high ground. Peugeot remains in place somewhere between the two

We’ll have the story straight as soon as possible. But as Jimmy Buffet famously said, it’s 5 o’clock somewhere, and in France, the work day is definitely over right now.

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16 Comments on “PSA Still Burning Cash, Banque PSA Downgraded To Junk...”

  • avatar

    I’m not trying to be bearish, but I don’t expect to see PSA in its current form survive through the Euro market crash. There is just too much extra capacity and PSA is the weakest automaker. Unless the French government is willing to waste billions keeping PSA on life support (they just might, though the EU probably wont let them) or a Chinese company takes over, I think its “au revoir.”

    • 0 avatar

      “or a Chinese company takes over”

      Where would the Chinese find the funds to buy Europe’s second-largest automaker? (Perhaps they could get Victor Muller to take over PSA first, seeing as he’s shown himself in the past to be very determined to sell a struggling automaker on the cheap to buyers that *have to be* Chinese, all obstacles be damned.)

      • 0 avatar
        Big Al from Oz

        The Chinese seem to have alot of money to spend in Australian mining. What is the true value of PSA?

        The French have brought this on themselves. There “insular” industrial policies governing their automotive manufacturers has done this.

        I can’t see the French liberalising their workforce to correct prevent this from occurring in other industries. Sergio, has been trying to free up the restrictive Italian workplace practices, but he had some success.

        The French never have never been as successful at developing an export market like the Germans and Asians. Incorrect protecitionist measures has gradually strangled them.

        The most successful vehicle manufacturers started expanding globally after the Fuel Crisis of the 70s. The French were left behind and relied to much on local consumption.

      • 0 avatar

        PSA’s market cap is only $2.2 billion right now, assuming they even wanted anything to do with a struggling French automaker, that would be chump change for a company like SAIC or FAW.

        Of course, an actual takeover might not even involve much or any cash, at this point, you might be able to walk away with PSA for a combination of stock and assumption of debt.

      • 0 avatar

        The question is not so much whether they have the money to BUY PSA — it’s not worth very much, or at least it won’t be soon — the question is whether they have the money to fix it, which I personally doubt. It will be interesting to see what happens because their long term prospects look awful but I personally can’t imagine it just dying….

  • avatar

    rumor has it the cash infusion by GM was reward for cutting ties with Iran. sounds reasonable to me given that the investment makes no sense whatsoever for any other reason. plus that nitwit, egomaniac Girsky is a sure sign of nothing good. can anyone give me any reason why this bankster is still around? Rattner ousted Wagoner but left his Rasputin.

  • avatar

    Ach…. my favorite color in the whole world!
    Whatever kind of blue that is…. bring it back.
    And no metallics.

    • 0 avatar

      You want the manufacturer’s name for that color?
      Let’s see…

      Sky blue (in certain areas of sky)
      Baby blue (after several washings)
      Robins’ egg blue
      Malibu blue
      Light blue
      Cerulean blue
      Shallow water blue
      Pastel blue
      Minty blue
      Sea Foam Green (no, wait – that’s yellow)
      True blue
      Sistene Chapel Blue
      Steel blue

      There are many more, even more fanciful. Since PSA is French, they probably call it “Sacrebleu”.

      • 0 avatar

        Kinda why I didn’t venture my own name for it. My brother’s TR4 was that shade but I always thought my sister’s calling it Robin’s-Egg was girl-talk.

        I do know that color was used vastly more often in the ’50s as I am an old ad junkie. Forgot what kinds of paints were prevalent then … alkyds?

      • 0 avatar

        BTW, the color of your brother’s TR4 was “powder blue”. The color code for PPG paints is 12163, and the ICI color code is 8013. If you really want a car in that color, you’ll probably have to get a paint shop to match those codes.

        Just don’t go by “powder blue”, that was the TR4 designation in 1964. Both PPG and ICI have their own, possibly similar, colors with their own fanciful names, like “Evening Mist” and “Basin Street Blue” (cute, eh?). Ask for the paint codes and check a sample.

      • 0 avatar

        The right answer is Botticelli Blue.

      • 0 avatar

        Thank for your replies. I’d never heard of Botticelli Blue but now I see that most other people on the planet have…. when I said it out loud my wife was like: “Oh, sure, Botticelli Blue…” as in “Oh, sure, Barack Obama… he’s the president now.”

        The history of car paint is becoming inordinately interesting to me… best read up some more.

  • avatar

    Why so much attention to the surrender monkeys. Irrelevant.

  • avatar

    Another one goes to Chinese garbage can. In the end Chinese will end up with all garbage from around world in exchange for real cash. French could make fortune by selling PSA to highest payer from China and as bonus save billions of taxpayer’s money. But of course in real world common sense does not apply to Government and 50% of its people.

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