President Hollandes poll ratings hit by economic storm

President Hollande's poll ratings hit by economic storm

As ringing endorsements go, it didn't exactly smack of complete reassurance.

"As the main shareholder of Faurecia stock, it is up to PSA Peugeot Citroen to decide what it intends to do with its majority stake," was the slightly terse reaction from my question to the French supplier surrounding persistent rumours the automaker is looking to offload its 57% interest in the component producer.

The speculation has been swirling for some time now and is stubbornly refusing to dissipate into the normal business ether. Is there any substance to it or is it idle conjecture?

PSA is doggedly sticking to its guns, rolling out its oft-repeated mantra with a spokeswoman from Paris telling me: "Faurecia is not for sale - this is what we say at the beginning of 2013 and we did not change our position."

But Faurecia's comment is intriguing. "It's up to PSA to decide what it wants to do," has an edge of frustration to it, resignation even, that something, whatever that is, could be in the offing.

The supplier also offered a robust defence of its independence, positioning itself as slightly removed from PSA's orbit, without upsetting its neighbour in the French capital.

Faurecia insists "on a day-to-day basis" it continues to be managed fully independently from PSA on three points, namely operations, financing and governance.

The component maker points out from a customer standpoint, PSA is third behind Ford and Volkswagen, while its financing is "fully secured and with no link to PSA."

It also added out of the 13 members on the Faurecia board of directors, seven are independent "and thus constitute a majority."

But the speculation has been fuelled by other rumours circulating PSA is looking to become closer to Chinese partner, Dongfeng, a development that could net around US$4bn, in cooperation with the French government, although there is no confirmation of this.

Meanwhile, there are reports circulating component producer Magna could be interested in looking at Faurecia, although these too are unsubstantiated.

Rumour, speculation, hints, claims, counter-claims, noises off, silence, all go in the pot to make, well, nothing of substance, but still the smoke won't clear, the mood music still uncertain.

What is certain is PSA recently disposed of its Gefco logistics subsidiary for EUR800m to Russian Railways, a move that while clearly generating a vast amount of finance, is also indicative perhaps of its need to raise cash.

Faurecia could simply be the latest target of rumour adding to a burst of activity that also saw a sale and leaseback of PSA's Paris headquarters in the avenue de la Grande Armee, while further speculation has emerged it could be mulling a downsizing of its Mulhouse operations now producing fewer than 250,000 units per year.

Rumours surrounding PSA come at a time when France is enduring one of the most turbulent economic periods in its modern history.

Huge unemployment currently nudging 11%, tough austerity budgets aimed at tackling deficits and a general feeling of malaise are stalking the country.

I was at the Forum on the European Automotive Industry in Lille last week organised by Nord France Invest and the breakout talk among delegates was just how low could President Francois Hollande's poll ratings sink.

Not in recent memory it seems has a President plummeted so low in the public's estimation and just to rub salt in the wounds, the French press today (22 November) published a map showing no region in the country had been spared swingeing job cuts.

As a result of that, France's traditionally militant unions, militant by northern European standards at any rate, have mobilised as only they know how and have taken to the streets, packed the airwaves and made their visceral opposition to rationalisation, abundantly clear.

Only this week, images of burning tyres outside Goodyear's Amiens Nord plant were shown, while union members at the same plant, one dressed bizarrely in a Viking helmet, were seen hurling eggs at a company charged with helping them secure employment either within the company or elsewhere.

PSA is the very public face of the French automotive sector facing challenges, but it is just one symptom of the deeply-ingrained difficulties the country as a whole faces.

It's hard not to feel some sympathy for President Hollande - even from this side of the English Channel. Faced with rapidly depleting national coffers and enormous dole queues - just what is he supposed to do to placate those irate labour bodies?

PSA is only one company - admittedly a very large one and one burned deep in the French psyche - but is indicative of just some of the challenges facing the Head of State as he contemplates his in-tray.