PARIS Dec 18 PSA Peugeot Citroen
named a senior government adviser and former head of EADS
to its supervisory board, delivering on a pledge the
struggling carmaker made in return for a state-backed bailout.
The Peugeot board agreed to submit the nomination of Louis
Gallois, a senior economic adviser to President Francois
Hollande's government, to the annual shareholder meeting in
April, the company said in a two-line statement on Tuesday.
Gallois, a former chief executive of European Aeronautic
Defence & Space Co. and the state-owned SNCF railway, recently
prepared a far-reaching report on French competitiveness that
recommended slashing payroll taxes, an effective endorsement of
longstanding auto industry demands in which the carmaker's
controlling Peugeot family may take some comfort.
Peugeot, one of the carmakers worst hit by the collapse of
auto sales in austerity-strapped southern European markets, drew
ministerial wrath in July by announcing plans to scrap 8,500
jobs and a major assembly plant.
While the French government is domestic rival Renault's
biggest shareholder with a 15 percent stake, it has no
equity holding in Peugeot.
But the Paris-based carmaker, struggling to halt cash burn
of 160 million euros ($211 million) a month at its core auto
division, was forced to seek a state-backed rescue for its
Banque PSA financing arm after a series of credit downgrades hit
In return for an 18.5 billion euro package including up to 7
billion in state loan guarantees, Peugeot agreed in October to
appoint a government-nominated board
The bailout and increased government intervention in Peugeot
has raised doubts at alliance partner General Motors
about cooperation potential beyond a handful of joint projects
already outlined, sources have said.
"It's complicated because the uncertainty surrounding the
European market specifically makes any move in this area one
that has to be carefully considered," GM Chief Executive Dan
Akerson said about the Peugeot alliance in a Dec. 13 interview
with Automotive News.
"You want to advantage yourself, but at the same time you
don't want to disadvantage yourself by making a strategic
error," Akerson was quoted as saying.