French government to aid Peugeot-Citroën despite row with bosses

France’s Socialist government is to give PSA Peugeot-Citroën grants to build environmentally friendly cars in an effort to save some of the 8,000 jobs the troubled carmaker plans to shed. But the Peugeot family is furious at charges that it covered up the crisis that the company faced until after this year’s presidential election was over.

AFP/Thomas Samson

Industrial Recovery Minister Arnaud Montebourg met two Peugeot-Citroën representatives and two representatives of Renault on Friday in discussions to prepare a plan to aid the automobile sector. Details will be announced on Wednesday.

Prime Minister Jean-Marc Ayrault will meet Peugeot boss Philippe Variun on Monday and Renault boss Carlos Ghosn on Wednesday morning.

Montebourg had already announced the outlines of his plan on Wednesday, ruling out a rebate for replacing old cars by new ones but promising “massive aid” to encourage environmentally friendly clean cars.

But, he added, there would be strings attached, without giving details of what they would be.

PSA Peugeot-Citroën plans to shed 8,000 jobs in France, closing a factory in Alulnay-sous-Bois near Paris that employs 3,000 people.

On Thursday Thierry Peugeot, who chairs the company’s oversight committee, hit out at Montebourg and President François Hollande for their claim that the company postponed the lay-offs announcement until after this year’s presidential election.

In an interview on the Bastille Day national holiday Hollande accused company bosses of lying about the company’s condition and blaming labour costs for all of its problems.

“Strategic decisions that were not good were made,” he said. “There was also the behaviour of shareholders who awarded themselves dividends.”

The Peugeot family holds 25 per cent of the company’s shares.

Montebourg also talked about “dissimulation” when discussing the shock announcement.

“We’re ready to accept criticism but there are limits," Thierry Peugeot told the right-wing paper Le Figaro.

Leaders of former president Nicolas Sarkozy’s UMP waded in on Friday.

“Montebourg is the defender who shoots those in the frontline in the back,” said former prime minister François Fillon.

His rival for the right-wing party’s leadership, Jean-François Copé, claimed that “damaging a company’s image” and “explaining that it’s just the boss’s fault … is a threat to thousands of companies, thousands of jobs”.