Troubled French supplier, GM&S has been granted a bankruptcy protection lifeline until 23 June as judges have allowed it to continue the search for a new buyer.
GM&S’ La Souterraine factory in the French region of Creuse, produces stamping parts for Renault and PSA, with both automakers being “asked” this week by new Minister of Economy, Bruno Le Maire to guarantee a combined EUR7m (US$8m) of extra orders to bring the total turnover to EUR22m.
Despite the supplier only employing around 300 staff, its knife edge situation has triggered enormous coverage in France, where its fate is widely regarded as an early litmus test of newly-elected President Emmanuel Macron’s industrial policy.
Macron has barely crossed the threshold of the Elysée Palace and only just appointed Edouard Philippe as Prime Minister, but GM&S’ plight has shot to the top of his industrial in-tray, leading the Economy Minister to issue his ‘request’ Renault and PSA inject further orders into the struggling stamper.
Both automakers remained coy as to whether Le Maire’s request was advisory or compulsory or as to whether the European Commission might have a view on his intervention, but as a shareholder in both manufacturers, it may be Paris feels it is within its jurisdiction to act in the way it has.
“The period of observation of bankruptcy protection will be renewed,” a Tribunal de Commerce de Poitiers spokeswoman told just-auto from France. Offers are invited to be submitted by 7 June after which the Tribunal will deliver its final decision on 23 June in Poitiers.
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The breathing space will come as a relief to the Confédération Générale du Travail (CGT) union, which told just-auto it was prepared to detonate gas cylinders attached to a tower at the factory, while machinery has already been destroyed using welding torches.
The intervention from the French State so early in Macron’s fledgling Presidency may come as a surprise to some, but may well be an indication of the direction of policy from the new Commander-in-Chief, whose rise to power sparked union protests on the day of his inauguration.
Quite how voluntary Le Maire’s instruction to Renault and PSA was remains a mystery, but a statement from his office makes clear his intention not to toss GM&S to the market wolves.
“Bruno Le Marie, Economy Minister, spoke with Renault CEO, Carlos Ghosn and PSA chairman, Carlos Tavares about the GM&S situation,” said a statement from the Ministry in Paris. “He asked them to commit to further orders allowing the business to continue and further discussions with buyers [to take place].
“PSA committed to increase orders by EUR10m (US$11.2m). For its part, Renault committed to double its orders to take them to EUR5m to EUR10m. These commitments will allow us to reach turnover in 2017 of nearly EUR25m and make possible for the business to continue and to find a buyer.”
Potential buyers are thought to be GMD, whose activities also include stamping, as well as an unnamed property developer.