Sad to watch our future unfold right before our very eyes. The what jobs will we have?
Just look at the Financial Times (FT) chart. It is all you need know. What do you think is causing that?
In the context of the above, no explanation is needed that quietly, and without much fanfare, French car-maker, Peugeot, and Europe’s second largest after VW, recently received a government bailout.
Carmaker Peugeot gets $9.1B government bailout
The French government has agreed to underwrite up to €7 billion ($9.1 billion) of bonds issued by Banque PSA Finance SA, the financing unit of carmaker PSA Peugeot Citroen SA, allowing the French automaker to offer low-cost credit to its dealerships and clients amid a slump in sales.
Peugeot announced the deal on Wednesday, Oct. 24. It also said it had agreed the basis of a €10.5 billion restructuring of existing loans and asked banks to provide a further €1 billion of new debt to its finance unit.
The deals effectively immunize Peugeot’s credit unit against recent downgrades of its parent’s debt rating. That had threatened to drive the lending arm’s rating to junk and would have forced it to increase the rates on loans to its own dealerships and to clients, hurting car sales that are already suffering from a Europe-wide slump.
The government, in return for the debt guarantees and its role in cajoling the banks to extend new loans to Peugeot, has demanded that Peugeot pay no dividends, undertake no share buybacks and issue no new share options to its managing board until the debt guarantees expire. Family-controlled Peugeot also agreed to add a workers’ representative and a government appointee to its board.
“The government has no intention of making gifts without demanding anything in return,” French Prime Minister Jean-Marc Ayrault told France Inter radio on Wednesday. “We ask the PSA group not to pay dividends, stock options or buybacks – that would be scandalous – and to concentrate on turning the company around.”
Expect many more such bailouts as a relentlessly socialist and protectionist Europe does all it can to preserve much needed votes err jobs in the critical, if greatly noncompetitive, car-making sector, with all other sectors, soon to follow? As Socialism breeds lack of competitiveness. quality also drops spiraling the whole imdistry down