Bloomberg News

French Government Seeks Solutions to Soften Peugeot Plan

July 15, 2012

French Government Seeks Solutions to Soften Peugeot Plan

An employee inspects a Citroen C3 automobile, produced by PSA Peugeot Citroen, at the Aulnay sous Bois PSA production site in Paris. Photographer: Antoine Antoniol/Bloomberg

French Finance Minister Pierre Moscovici said the government is “looking for solutions” to help prop up car sales and soften PSA Peugeot Citroen (UG)’s decision to slash jobs and close a factory near Paris.

Europe’s second-biggest carmaker last week announced plans to cut 14,000 jobs and shut an auto plant in France for the first time in two decades to stem widening operating losses.

Moscovici and his colleagues will work to “greatly improve the quality of this plan, which in its current state isn’t acceptable,” the minister said today on Europe 1 radio, echoing comments by President Francois Hollande.

The government’s goal is to save more of Peugeot’s jobs, ensure there are no forced firings, soften the blow for the workers involved and keep the Aulnay plant operating as an industrial site, Moscovici said. The government will also announce measures on July 25 to boost French car sales and prop up the entire auto sector.

“We are here to find solutions,” Moscovici said. Hollande’s comments yesterday were meant to be “firm and constructive” toward Peugeot. “I’m not here to destabilize, I’m here to build,” Moscovici said.

Hollande yesterday said he would lean on Peugeot to rework the plan, consider incentives to spur sales of environmentally friendly cars and study the possibility of providing credit for vehicle purchases, though he won’t adopt cash incentives as his predecessor Nicolas Sarkozy did to counter a recession in 2009.

To contact the reporter on this story: Andrew Roberts in Paris at aroberts36@bloomberg.net

To contact the editor responsible for this story: James Hertling at jhertling@bloomberg.net


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