The French government has urged PSA Peugeot Citroen to rethink its plans to cut jobs and close its plant in Aulnay, just outside Paris.
Arnaud Montebourg, the minister for Industrial Renewal, called on CEO Phillippe Varin to consider all other options in good faith. He said Peugeot has a duty to France as a nation.
In an interview with France 2, Montebourg said the company had paid out huge dividends to shareholders and spent millions buying back its own shares.
“This wasn’t done for investment or to improve competitiveness, these are financial transactions of convenience. These issues need to be clafrified,” he said.
But unlike its French rival Renault, the state owns no part of PSA.
The announcement is a major blow for Socialist President Francois Hollande who came to power promising to boost French manufacturing.
His government’s rescue plan for the French car industry is set to be unveiled on July 25th.