Lower Saxony Opposing PSA Bail-Out to European Commission

In order to cope with low revenue, PSA PeugeotPeugeotFrance, 1882 > present120 models
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-CitroënCitroënFrance, 1919 > present94 models
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is taking a multi-billion euro loan from the French government.

The company reported its third quarter financial information on October 24. Revenue for the automotive division is down 8.5% for the quarter, down 7.8% for September and down 9.9% through the first nine months of the year. 

The German state of Lower Saxony is the second-largest shareholder in VolkswagenVolkswagenGermany, 1938 > present98 models
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, and it is bringing an official complaint to the European Commission about the French government's aid to PSA.

"VW and Lower Saxony see these state loans very critically because they won't help solve the problems that certain European states have with their automotive industry," said Lower Saxony Prime Minister David McAllister.

The deal between PSA and the French government would give the company €5 billion to €7 billion in government loans in exchange for the government being able to appoint the labor leader and a board member. Members of the PSA board may not receive stock options or be paid dividends as long as the state is providing loans to the company. 

Lower Saxony has 20% voting rights in VW.

It is possible that this entire argument is moot, if GMGMUnited States of America, 1998 > present8 models
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and PSA announce their joint venture that would merge Opel, Vauxhall, Peugeot and Citroën. An announcement about the merger is meant to come on October 31. 

On October 24, GM and PSA announced that they are developing 4 new platforms that will be shared among the four automakers by the end of 2016 - a compact crossover, a multi-purpose vehicle, a low CO2 small car and a mid-size car. 

Source: Automotive News Europe