A report commissioned by the French government has highlighted the need for ‘inevitable’ job cuts at PSA Peugeot-Citroen and pointed to strategic errors in the past – especially maintaining independence at the cost of a strategic relationship with a partner.
The report by industry expert Emmanuel Sartorius into the financial state of the company suggests that job cuts and restructuring at PSA Peugeot Citroen are now unavoidable to safeguard its future as it struggles in a European car sector riven with overcapacity.
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“This study has shown that PSA is currently in a difficult situation, resulting both from economic and structural reasons,” the report said.
The report said strategic errors were partly responsible for the crisis at the loss-making company.
The proposed PSA job cuts and the shuttering of the Aulnay plant have been controversial in France. Socialist President Francois Hollande was elected on a mandate to project jobs and had described PSA’s planned job cuts as unacceptable.
The report was particularly critical of the Peugeot family’s long held policy of protecting the carmaker’s independence, “in place of seeking a partner that would have allowed it to become a world-class player” and cut its reliance on Europe.
While Peugeot has an embryonic alliance agreement with GM, it’s a long way behind Renault’s alliance with Nissan.
The report also suggested that Peugeot and the family had favoured dividends and share buybacks over investing in new markets, in contrast to Germany’s Volkswagen.
It also said the company was handicapped by its position as “generalist constructor” stuck between “the low-cost products of central and east Europe and the premium German constructors”.
Adding to the furore and debate that the report has unleashed in France, a German newspaper has suggested that GM may be backing away from tentative plans to share its mid-sized car technology with PSA.
As part of the partnership announced earlier this year, it has been suggested that future mid-sized cars for the two companies would be based on GM platforms and assembled at Opel’s Russelsheim plant. Der Spiegel reported that the proposal is meeting resistance inside GM.
GERMANY: GM may share PSA platform for Russelsheim-built cars
