Company on the ropes seeks tie-up with financially secure dominant global player
PSA Peugeot Citroen has its backs to the wall, and empty pockets. After casting around for the usual suspects in China, PSA is back to their American Friends at GM. PSA is ready to hand over the keys and control to GM, as long as the General keeps PSA from dying. Says Reuters:
“PSA Peugeot Citroen’s founding family has offered to give up control of the troubled French automaker as it tries to revive plans for a closer tie-up with General Motors backed by a fresh capital injection, sources said.”
PSA is quickly running out of cash. No bank is willing to lend. A tricky rescue plan by the French government that wanted to (legally) prop up PSA’s bank instead of (illegally) propping up PSA outright, was thwarted by EU commissars in Brussels, who had no problem seeing through the highly translucent operation. That deal is on hold.
After traversing all stages of the Kübler-Ross model of grief, the PSA family reached the acceptance stage, and is ready to give up control to a foreign investor, Reuters says. “The Peugeot family has now accepted that they’ll lose control, so this is no longer an issue,” an inside source told the wire.
According to the report, PSA did sound out “other potential investors including Chinese partner Dongfeng,” and apparently received the cold shoulder. Dongfeng is happily enjoying a pleasurable threesome with Renault and Nissan. And knowing the Chinese, they rather wait until the company is bankrupt, instead of pouring dear exchange-controlled money down a black hole.
That left PSA with only one option: Sell controlling shares to newly cash-flush GM. GM already collared PSA for 7 percent. The French-American tiue-up won’t be easy either:
“Any deal combining Peugeot with GM’s European Opel division would face major political hurdles because it would bring more factory closures and job losses in France and Germany,” people with knowledge of the discussions told Reuters. Not to mention political hurdles back in America.
Last month, GM CEO Dan Akerson said GM doesn’t ” have any intention of investing additional funds into PSA at this time.” Then he added: “If we see something changes, we’ll evaluate that.”
In the byzantine world of European carmaking & politics, the public display of affection with Chinese and American investors could also be an exercise to fuel the desire of French politicians. Knowing that jealousy is the best aphrodisiac, PSA could be banking on chivalrous notions in Paris, and attempts to keep la Déesse – the queen of French carmaking – from being raped by foreign hordes.
My long-lost EU industry friend, who I found in the usual bawdy bar in Berlin last night, had another version after who knows how many drinks: “I know why Ewanick had to go. Remember that truck ad where it rained dead frogs? That was going too far.”
And with that, we return to our time-honored tradition of illustrating acts of industrial tie-ups, submission, and power-exchange by companies on the ropes, with further tasteless, disgusting gems from our rich collection of smut. Protests are futile.
Love the image.
Also, so Ewanick got the axe for the Superbowl commercial eh? What went too far, the Ford taunting or the Magnolia reference?
Holy mixed and mangled metaphors, Batman.
A real D/s couple would laugh on that setup…
:D
Let them die. French cars are terrible. They are not good enough even for the Chinese auto industry.
Can’t say I’m a huge fan of French cars myself, but I’d rather buy French than anything German or Japanese, and I’m sure I’m not the only one…
“Remember that truck ad where it rained dead frogs? That was going too far.”
Heh. He may have been referring to French seer Nostradamus with that one. Maybe the death of PSA is foretold in one of the quatrains? I’ll bet the B&B can come up with the right one, with Nostradamus’ favorite ending: “Blood, milk, frogs, a two-headed baby born in Ravenna”.
Ah Nostradamus, that had not occurred to me.
I only read Playboy for the articles. TTAC has the best pictures.
In pre-EU days, the French government would have made a shady deal and bailed Peugeot to protect “French Culture”.
Not anymore. Brussels is now looking over their shoulders.
Oh my! A cash flow crisis too big even for “the family” not to have provided for with back up credit lines? Surely, they must be mostly out of the game.
Punch line from an old joke: “In Hell the French do the banking, the Germans run the police, and the Swiss make love.”
If GM ends up taking over PSA, then PSA eventually becomes Chinese anyway…
By the way, does Bertel Schmitt know whether PSA was one of the unnamed automakers described in this AutoNews article about BAIC being on the lookout for European car makers to buy:
http://europe.autonews.com/apps/pbcs.dll/article?AID=/20130622/ANE/306229997/beijing-auto-eyes-three-automakers-as-potential-takeover-targets-in
Seems there is a resident kink at TTAC.
Disturbing.
TTAC Deathwatch continues….
You should see Bertel’s Uwe Hück folder.
Where is Charles Martel when we need him?
What is the likelihood of the French actually letting PSA die?
The EU seems intent on blocking efforts by the French to save PSA and the French don’t have bottomless pockets anyway. They can’t just print a billion euros a year like our king does.
Why should the General care about PSA? Read this as an exit strategy from the Hollande barracks not wanting to be tainted – Government du Demise..