French carmakers are to receive up to EUR6bn ($US7.7bn) of state aid to help survive the financial crisis, the country’s prime minister said today (20 January).
Go deeper with GlobalData
Francois Fillon announced the aid during a meeting with executives from car manufacturing companies, parts suppliers and union leaders to agree on a broad plan dubbed a new ‘auto pact’, Agence France-Press reported.
“I think all European governments share this opinion – we will not wait. There is an emergency. We need a massive response on the automobile sector’s financing,” Fillon told the one-day summit on how to help France’s battered car industry, according to Reuters.
PSA Peugeot Citroen CEO Christian Streiff had said earlier 2009 would be “terribly difficult” and could not predict whether the automaker would be profitable this year.
He told Le Figaro the risk of a large European carmaker going bankrupt was close to zero, Reuters said.
US Tariffs are shifting - will you react or anticipate?
Don’t let policy changes catch you off guard. Stay proactive with real-time data and expert analysis.
By GlobalDataAsked whether the firm would make a profit in 2009, Streiff said: “I cannot answer you. Today, like the majority of our competitors, we make forecasts for three months and that seems long already.”
French industry minister Luc Chatel said on Monday that France could offer financial assistance to the battered local industry in exchange for stakes in carmakers.
The French government has made it clear that, if the state were to make taxpayers’ money available to support businesses, “the factories have to stay in France.”
Asked about state financing, Streiff reportedly said this was possible “under conditions that do not change the make-up of our capital, our independence and our freedom.”
He said the firm had launched a Cash 2009 plan to cut costs and save money but nonetheless was in the best financial health among European automakers – and was well armed for 2009 “which announces itself as a terribly difficult year.”
He added there would be further consolidation in the world car industry and some makers risked disappearing.
