French Government To Unveil Automotive Plan Jul 25

By Geraldine Amiel

PARIS--France's government will unveil July 25 a nation-wide plan to support the country's automotive industry, notably with measures designed to boost French car spending, the French finance minister Pierre Moscovici said Sunday.

Mr. Moscovici's comments came after France's president Francois Hollande Saturday lashed out at a restructuring plan by French automotive group PSA Peugeot Citroen (UG.FR) which includes 8,000 job cuts and the closure of a plant, calling it "unacceptable" and insisting that "it must be renegociated."

Mr. Hollande's comments raised questions about the actual means of his freshly-elected government to force a privately-held company to change its restructuring plans and avoid massive job cuts, or even curb the ongoing deterioration of the country's competitiveness.

Yet even though Peugeot is privately-held, the government has means to pressure its management into amending its plans, Mr. Moscovici said, without elaborating, during an interview with i-Tele television channel and Europe 1 radio.

The minister declined to say if the government was considering getting a stake in Peugeot's capital as part of its plan to support the French automotive industry.

Peugeot's announcement Thursday sent a shock wave through the country and underscored the difficulties faced by France's industries in general, plagued by low competitiveness and the impact of the European sovereign-debt crisis.

Mr. Moscovici said the automotive plan will be presented during a cabinet meeting and kept referring to that plan when asked about the measures the government was mulling to amend Peugeot's own restructuring plan.

Mr. Moscovici insisted he was confident the country wouldn't enter recession this year, as the government forecasts a 0.3% growth for 2012. "France is a strong country which will remain so," he said.

-Write to Geraldine Amiel at [e-mail]