The Peugeot family will receive an invitation from French industry minister Arnaud Montebourg, but not for tea and cookies.
The minister “plans to summon members of the Peugeot family to explain why the car maker had continued to pay dividends even as it was facing mounting difficulties,” Reuters says.
PSA Peugeot Citroen said last week it would cut 8,000 jobs in France and close a plant in France in 2014. Currently, GM’s alliance partner PSA hemorrhages some €200 million ($244 million) a month. As if that is not enough pain, the minister will turn the screws a bit more.
Said the minister (who actually is “Minister of productive recovery”, hype is alive and well) :
“The Peugeot family has a number of things to explain to us and I will invite them to the ministry so that we can discuss them. Why were there certain financial operations at the time when Peugeot was already starting to experience difficulties, particularly dividend payments?”
The Peugeot family most likely will have questions of its own. Such as:
“Quels dividendes, Monsieur?”
According to PSA’s dividend schedule, the last time dividends were paid was for 2010, and that after a two year dividendless dry spell. “Given the Group’s 2011 results” PSA’s annual shareholders’ meeting of 25 April 2012 voted “that no dividend be paid in respect of 2011.”
Not that I mind, but if this was a Republican or Democratic senator investigating their automotive industries, would the headline have right “Right-wing Senator To Interrogate Peugeot Family Over Dividends. What Dividends?”
If it was in the US, writing “Republican” or “Democrat” would probably be enough to surmise the senator’s leanings. Since most of TTAC’s readership is probably not from France, “leftist”probably does get Bertel’s point accross (in his typical subtle fashion).
I think calling an actual Socialist Party member a “leftist” is entirely appropriate.
I don’t mind either, but I noticed a similar thing the other day in the article about “Socialist President” Francois Hollande’s Buy French plan.
https://www.thetruthaboutcars.com/2012/07/frances-socialist-president-offers-buy-french-plan/
Mr. Schmitt quotes two reports – one from Reuters and one from Bloomberg. Neither mentions the term “socialist” in connection with Hollande – Mr. Schmitt adds that in.
Reuters does, however, specify that the previous failed plan from 2009 was instituted by “conservative President Nicolas Sarkozy.” Mr. Schmitt mentions that plan but leaves the “conservative” bit out.
It’s not a big deal and I accept Bertel has the right to publish as he sees fit. Just a little… odd.
This ain’t the Hill, this is Europe. Here, a “leftist French government” remains a “leftist French government.” Pls google the term.
Montebourg et al are member of the Parti Socialiste, and that needs no translation.
I should have used “Socialist,” but that term is a bit overused.
I think “Socialist” might have been more apropos, considering that’s the name of the actual party. “Leftist” seems like we’re trying to make a point.
(besides, it’s only overused when someone says “Socialistic” or starts talking about Stalin, Mao and Pol Pot; these guys are Chardonnay socialists at worst)
The more neutral approach would have been to describe him as a French minister, because that’s what he is. But otherwise, yes, the party name would be more appropriate.
In any case, this sounds like a leverage play to haggle over reducing the number of planned job cuts. I haven’t followed it that closely, but Montebourg is making a big deal out of it, having described the planned cuts as an “earthquake to the French economy” and claiming that PSA has a “duty” to France.
What I haven’t heard is much of a plan to increase Peugeot sales so that this jobs program can be financed.
They can perform their duty to France by cutting themselves to a sustainable size and thus be able to provide some jobs, rather than bleed themselves to death paying people to do work that just ain’t there…
To be fair, PSA was profitable in 2011, and contrary to the claims in this article, 290 million euro in dividends were paid in 2011. (Refer to the annual report.) Still, I doubt that there is much of a plan that will inspire the drivers of the world to buy enough Peugeots.
@Pch, those would have been the 2010 dividends, which would have been actually paid out in 2011.
Maybe they are probing the pre 2010 dividends?
Also -does the Peugeot family have prefered stocks (like the Ford family) or common stocks? Maybe the prefered stock holders got dividends and the commoners got nuthin’?
I think you’re on the right track with preferred stock. I’m not an expert on French law, but in the US the definition of dividend can be quite broad. It could be a dividend on preferred stock or (possibly) even payments on convertible debt, etc.
If “invited” I’d recommend to the Peugeot family to send in their elite troops of bad-ass lawyers. Otherwise, sell, sell,…
The great thing about keeping the government out of the car business is you don’t need grandstanding political leaders wringing their hands about what the owners are paying themselves.
If they pay themselves too much, they simply go out of business.
because they [the family] used PSA like a cash cow. Hollande wants a bovine cull from the family. That way his government is spared most of the heat.
au large de la tête !
If anyone cares, PSA Peugeot Citroen generated over €1.3 billion in profits in 2010, the last time dividends were paid (at €1.10 per share). When they slipped into the red in 2011, dividends were cut off and have remained that way since.
I guess you could argue that, even when they were profitable, it was still a pretty thin margin and that, in retrospect, the money might have been better spent elsewhere; but there doesn’t seem to really be anything illegal, or even really unethical, about what they did 2 years ago.