PARIS (Reuters) - PSA Peugeot Citroen claims to be the world’s oldest car maker thanks to a wealthy, close-knit clan that has steered the business since 1810, but Europe’s number two manufacturer is having a tough time staying on the road.
The family-controlled French company announced 8,000 job cuts and the closure of a key assembly plant in the Paris region on Thursday in an effort to stem big losses that are burning its cash.
The firm began as a maker of laminated steel and tools when Emperor Napoleon was on the throne, then branched out into crinolines, bicycles and pepper mills - still regarded by foodies as the best - before betting its future on cars during la Belle Epoque.
Apart from one notable squabble, when the company split into two in the late 1890s - cars with Armand Peugeot and everything else with his cousin Eugene - before merging again in 1910, the descendants of founder Jean-Pierre Peugeot have remained tight. His heirs were in charge of the day-to-day running of the business until the mid-1960s.
Although they have since avoided the limelight, the Peugeots maintain a firm grip via Societe Fonciere Financiere et de Participation, the family holding which has 25.2 percent of PSA’s capital and 37.9 percent of the voting rights.
In 2009 the family fired then-Chief Executive Christian Streiff in a phone call, causing shockwaves in France’s genteel corporate world.
But the Peugeots came out in support of current Chief Executive Philippe Varin last month after La Tribune newspaper suggested that they wanted him to go over PSA’s alliance with General Motors.
Only a few Peugeots are employed by the firm that bears their name. The rest of the family has opted for a reclusive lifestyle since one member was kidnapped in the 1960s.
Some of them still live near Valentigney in eastern France, where Peugeot began operations, but others have decamped to nearby low-tax Switzerland, where a local financial magazine estimates they are among the richest French expatriates.
The chairman of Peugeot’s supervisory board, Thierry Peugeot, 55, returns from Paris to the family seat — nicknamed “chateau Peugeot” by locals — on most weekends, when he can be found shopping at the local do-it-yourself store.
Thierry’s younger brother, Xavier, who heads the Peugeot museum in nearby Sochaux, is often spotted along with cousins Eric and Christian cheering for the local soccer club, founded by a Peugeot ancestor in 1928 and languishing near the bottom of the French first division.
“There are only about six Peugeot family members among a workforce of 200,000 so we can easily lose ourselves,” Thierry Peugeot said in a recent interview.
His bespectacled cousin Robert, 62, who is also chairman of the family holding company, was the first Peugeot in decades to make headlines in 2009.
While he was away on a shooting holiday in Turkey, burglars broke into his apartment in Paris’ wealthy 16th arrondissement and stole a dozen gold ingots as well several Cartier watches.
Newspaper reported that the gold was initially declared to be worth 500,000 euros ($612,500) but its estimated value was later reduced to 150,000 euros amid allegations that Peugeot wanted to avoid an enquiry by tax authorities.
Despite the theft and the shrinking value of his PSA stake, Robert Peugeot can still count on his other day jobs for financial support.
He sits on the board of several French companies, including luxury goods maker Hermes International SCA, another firm controlled by a tightly knit family.
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Reporting by Elena Berton; Editing by Paul Taylor