FRANCE: PSA union voices fears as Peugeot family stake rumours gather pace
PSA Peugeot-Citroen's moderate CFTC union says it would "not be astonished" if new capital was to be injected into the struggling automaker, although it declined to be drawn on whether this could see the Peugeot family dilute its stake.
The family reportedly holds 25.4% of PSA that allows it 38.1% of voting rights, but following a Works Council meeting last week, rumours are swirling around France it could exit the Group in favour of General Motors injecting potential new capital.
"If tomorrow it is announced that an entry of GM or another group - of capital - I will not fall out of the wardrobe [will not be astonished]," CFTC (Confederation Francaise des Travailleurs Chretiens) union leader, Franck Don, told just-auto from Paris.
"The situation of the [PSA] group today is very difficult. Up until today, the PSA Group is a family group. What we fear is if PSA abandons this [ownership] predominance, we will lose the social fibre of the business."
Speculation has centred on increasing ties between General Motors and PSA that could see further rationalisation of the French automaker in addition to the 8,000 planned job cuts and the closure of the Aulnay plant near Paris designed to turn around its ailing fortunes.
"We have decided we would never comment on all the rumours and speculation around the alliance," a PSA spokeswoman told just-auto from Paris.
"In the future if there are new rumours, we just do not comment."
The CFTC leader revealed the Works Council meeting last week was held on the basis its contents remained confidential, but shortly afterwards leaks started to appear in France surrounding a possible diminishing of the Peugeot family stake.
"The only thing I know is after this Works Council, there were noises and [after] 48h, there were the first rumours which appeared," said Don. There were workers' representatives there, but who [met] in confidentiality and who were not allowed to discuss it."
"We can only wait and see the results of the discussions."
General Motors paid US$400m for a 7% stake in PSA and earlier this year announced some further details of their strategic alliance, including plans for shared new product development and joint purchasing in Europe.
Shortly afterwards, in February this year, PSA's banking division received temporary authorisation from the European Commission (EC) for France to guarantee US$1.6bn to avoid any "contagion" to the country's banking system.
PSA has been burning considerable cash to add to its sales woes but Metzler Bank automotive analyst, Juergen Pieper, told just-auto earlier this year that figure was falling: "We always heard from PSA, outflow is EUR200m [burn], so now it is hardly more than EUR100m per month," he said, although that comment was made four months ago.
PSA's automotive division saw first quarter sales fall 10.3% mirroring a 10% contraction in the European market.