PSA's Financing Unit Set To Win EU Approval For State Aid By Next Week
A $9.25 billion (€7B) loan guarantee from the French national government for the Banque PSA Finance arm of PSA/Peugeot-Citroen, Europe’s second largest car company, will likely gain approval from European Union regulators next week, according to sources cited by Reuters and Bloomberg.
The guarantee is aimed at ensuring the carmaker’s viability by allowing it to offer competitive financing rates to car buyers. The EU Commission is still in talks with PSA over their restructuring plan which would cut 11,200 jobs and close the Citroen plant at Aulnay, outside of Paris.
Peugeot’s automotive unit burned through 3 billion euros ($3.96B) in cash last year. Bloomberg reports that the French automaker is in discussions with banks on how to put its financial house in order, with options including selling off a stake in Banque PSA Finance or other assets to increase its capital.
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Flogging a "dead horse?"
Flogging a "dead horse"?
if they need government guarantees/loans that means no one in the World is willing to give them a loan at reasonable interest rate. Sounds a lot like the GM/Chrysler tale.... $ 9 billion comes close to what GM/Chrysler got if you take into account that France is significantly smaller than the US. Funny how when a company fails, socialism all of sudden is an accepted system and the losses get "socialized".
The fact seems to be that there are far too many automobile companies in the world, and about 25% of them must disappear, especially with 1st. and 2nd. world countries able to produce cars as good as and much cheaper than 1st. world countries. From the perspective of economics, what can be done as well as, and more cheaply in a lower cost economy is where the production should take place. France and other 1st. world countries should be using R and D to develop and produce new sophisticated products that reflect their levels of development. We should be emphasising education and technical studies with the insistence that students actually learn something of practical application in a high tech nation. The current emphasis on "self esteem" and "social adjustment" is largely a waste of time and money. Entitlement is earned not bestowed, and good jobs make it possible. Learn and earn.