The French car-maker, PSA Peugeot-Citroen has approved a cash-raising deal by selling stakes in the company to China’s Dongfeng and the French government.
The company is looking to raise around three billion euros. The exact deal will be hammered out over the next few weeks.
While perhaps not running on empty, the car-maker’s reservoir of cash has sprung a serious leak.
Global car sales are down 4.9 percent, while the European market is the worst it’s been for two decades. Russia is down 22 percent. Only China, up 26 percent, seems ahead of the game.
France’s CGT workers union is not happy with what it sees as the French state helping a company cut jobs. “I know that the aim of Peugeot’s leadership is to move plants abroad. For the state to join them in this policy is a real scandal,” said union representative Jean-Pierre Mercier.
Under the current deal, the government and Dongfeng would each take a 14 percent stake in Peugeot, while the Peugeot family would lose control of the business it founded in 1882.
It was reported last month that Peugeot and Dongfeng might team up in an industrial and commercial partnership to produce low-cost small cars for south-east Asian markets.
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