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French Socialist Nightmare: 'The State Cannot Do Everything'
The preannouncement came Thursday evening: PSA Peugeot Citroën, Frances largest automaker, would have a write-down of 4.7 billion. On top of a hefty operating loss. It would be colossal. An all-time record. Rumors spread immediately that PSA would need a bailout. The second in four months.PSA passenger car sales in France dropped nearly 17% in 2012 from an already awful 2011. In January they dropped another 16.7%. Sales for all automakers dropped 15%, and PSAs market share had eroded further. Kia-Hyundai sales jumped 21.2%, the only major automaker with gains. Even Volkswagen Group got clobbered: down 23.9%. PSA isnt internationally diversified enough. It doesnt have much in China and nothing in the US, the largest markets in the world, both growing. Its mired in Europe where auto sales have ground to a halt. Its bleeding 200 million a month. Its trying to lay off 8,000 workers and shutter its plant in Aulnay-sous-Bois. And its Banque PSA Finance was bailed out last October with 7 billion in taxpayer money. The government was so worried that it was actively studying a bailout, sources told the Liberation after the losses were announced. It was just hypothetical. But if a capital infusion would become inevitable, the state could participate, the source said. Instantly, a cacophony of discord eruptedwithin the Socialist government. Posted by: tipper 2013-02-10 |
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