Business

Peugeot chairman warns of 'dangerous' criticism

  • 20 July 2012
  • From the section Business
Peugeot car production line
Peugeot has announced 8,000 job cuts and the closure of a factory

The head of PSA Peugeot Citroen has warned that French government criticism of the its plans for 8,000 job cuts is creating a "dangerous" situation.

Chairman Thierry Peugeot told French daily Le Figaro that the criticism was undermining investor confidence.

President Francois Hollande has denounced the plan as "unacceptable" and the government has criticised PSA's corporate strategy.

Ministers have questioned how the company is still able to pay dividends.

Peugeot family members control Europe's second largest carmaker through a 25.2% stake commanding 37.9% voting rights.

Mr Peugeot said: "We are ready to accept criticism, but there are limits... The attacks the company is currently facing have an immediate effect on (investor) perception. This is a dangerous situation."

He continued: "We are well aware of the seriousness of the plan to cut 8,000 jobs. These measures are painful. I understand they can cause shock within the company, the government and the whole of the country."

But he added that the carmaker was "forced to adapt" to falling European sales and "cannot stand by and do nothing".

Peugeot's share price has fallen almost 20% since it announced restructuring plans earlier this month.

The carmaker's intention to cut jobs and close a factory has caused dismay in Paris because the new socialist government came to power on a promise to reverse industrial decline.

French media have reported that the government is working on an aid package for the car industry that is likely to include help for environmentally friendly vehicles but no new car scrappage incentives.

Details of the package could be announced as early as next week.

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