Parisian Palace Whispers: Penniless PSA Wants To Submit To GM
Company on the ropes seeks tie-up with financially secure dominant global player
PSA Peugeot Citroen has its backs to the wall, and empty pockets. After casting around for the usual suspects in China, PSA is back to their American Friends at GM. PSA is ready to hand over the keys and control to GM, as long as the General keeps PSA from dying. Says Reuters:
“PSA Peugeot Citroen’s founding family has offered to give up control of the troubled French automaker as it tries to revive plans for a closer tie-up with General Motors backed by a fresh capital injection, sources said.”
PSA is quickly running out of cash. No bank is willing to lend. A tricky rescue plan by the French government that wanted to (legally) prop up PSA’s bank instead of (illegally) propping up PSA outright, was thwarted by EU commissars in Brussels, who had no problem seeing through the highly translucent operation. That deal is on hold.
After traversing all stages of the Kübler-Ross model of grief, the PSA family reached the acceptance stage, and is ready to give up control to a foreign investor, Reuters says. “The Peugeot family has now accepted that they’ll lose control, so this is no longer an issue,” an inside source told the wire.
According to the report, PSA did sound out “other potential investors including Chinese partner Dongfeng,” and apparently received the cold shoulder. Dongfeng is happily enjoying a pleasurable threesome with Renault and Nissan. And knowing the Chinese, they rather wait until the company is bankrupt, instead of pouring dear exchange-controlled money down a black hole.
That left PSA with only one option: Sell controlling shares to newly cash-flush GM. GM already collared PSA for 7 percent. The French-American tiue-up won’t be easy either:
“Any deal combining Peugeot with GM’s European Opel division would face major political hurdles because it would bring more factory closures and job losses in France and Germany,” people with knowledge of the discussions told Reuters. Not to mention political hurdles back in America.
Last month, GM CEO Dan Akerson said GM doesn’t ” have any intention of investing additional funds into PSA at this time.” Then he added: “If we see something changes, we’ll evaluate that.”
In the byzantine world of European carmaking & politics, the public display of affection with Chinese and American investors could also be an exercise to fuel the desire of French politicians. Knowing that jealousy is the best aphrodisiac, PSA could be banking on chivalrous notions in Paris, and attempts to keep la Déesse – the queen of French carmaking – from being raped by foreign hordes.
My long-lost EU industry friend, who I found in the usual bawdy bar in Berlin last night, had another version after who knows how many drinks: “I know why Ewanick had to go. Remember that truck ad where it rained dead frogs? That was going too far.”
And with that, we return to our time-honored tradition of illustrating acts of industrial tie-ups, submission, and power-exchange by companies on the ropes, with further tasteless, disgusting gems from our rich collection of smut. Protests are futile.
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