The period of instability faced by PSA could lead to an abandonment of power by the Peugeot family, founder of the brand. General Motors is expected to take the lead.
Peugeot is going through a very difficult period; the declining sales and financial instability are seriously affecting the French manufacturer. According to sources cited by Reuters, the Peugeot family, who founded the company, could withdraw from the leadership to leave room for General Motors.
“A dilution of the family would not be good news,” a spokesman for Peugeot’s moderate CFTC union said.
“One of the last remaining family groups would cease to exist in its current form,” he said. “It’s the family attachment to the company that has preserved its French roots so far.”
The American conglomerate could benefit from the lack of financial resources of the PSA. Many analysts argue that the French cannot afford to support the companies until the end of 2013. GM will take over only if it is willing to start an important investment in the PSA.
If rumors are true, and General Motors will be able to gain the reins of Peugeot- Citroen, the Americans will want to close French factories back home, to reduce costs. The French government will strongly oppose this measure, given that it has financially supported its manufacturer.
The decision to call the GM, which already owns 7% of the company, came after talks with the Chinese Dongfeng Motor Group failed. Currently, the Peugeot family holds 25.4% stake in PSA Corporation and controls 38.1% of the voting rights.
Sources close to the leadership, quoted by Reuters, said that the Peugeot family is already used to the idea that it will lose control of the company. PSA will need a new industrial plan to get a capital increase, which could come currently only from GM.
Peugeot clearly needs outside cash because the family has other investment priorities, said Xavier Lelasseux, a spokesman for the carmaker’s center-left CFDT union.
“If it comes from a new shareholder or GM that’s no bad thing,” he said. “The danger is that it would be used to buy up the strongest parts of the group to create savings for Opel, with a huge impact on jobs.”
Americans are ready to inject more money if they are satisfied that they could gain control and can integrate Opel and Peugeot, while streamlining the production. The transaction depends now on General Motors, which want assurances that they are free to lay off people and close plants at a reasonable price.
“It doesn’t bother us as workers whether our bosses are French or American,” said Jean-Pierre Mercier, who led the union’s unsuccessful fight against the Aulnay closure.
Recent experience shows that “having French bosses doesn’t protect our jobs”, Mercier said. “Our real adversaries are the shareholders.”
President Holland and his team will be the main opponents of the takeover, although it goes without saying that without GM, those of PSA cannot survive. Currently, Peugeot offers employment for approximately 77,000 French.