The FINANCIAL — French car maker Peugeot Citroen SA hasn't given any guarantee it will keep its factories in France operating at the same rate following its alliance with General Motors of the U.S., French Industry Minister Eric Besson said Monday.
"I have no guarantee, but has the clear intention to strengthen its industrial base in France, because it is in its interest and not to please the government," Besson said in an interview with local radio station Radio Classique.
Peugeot sealed an alliance with GM last week that aims at $2 billion in annual synergies by pooling their purchasing. The two companies will also develop common components and platforms on which future models will be based. According to London Stock Exchange, as part of the alliance, GM is taking a 7% stake in the cash-strapped French company whose automotive division lost EUR497 million in the second half of 2011. The French company is planning to raise EUR1 billion through a rights issue to bolster its finances.
The two companies won't share assembly lines before 2016, Peugeot Chief Executive Philippe Varin has said.
Unions in France are concerned about the possibility of Peugeot reducing output in France and cutting jobs, as the company struggles with chronic overcapacity and high costs.