PSA Peugeot Citroen has welcomed the French government’s five-year €3 billion (£2.62bn) loan to support the group’s development programme for more efficient and affordable vehicles.
Renault has also been given €3bn (£2.62bn) to help support it through the recession.
The deal means that no French plants will close and all industrial decisions by the two companies will be examined by the French government for the next five years. Top executives at both companies will also have to forgo their bonuses.
To support this strategy, PSA has said it is committed to maintaining its French R&D, engineering and testing facilities.
As a result of the support package, the PSA will not close any of its French plants and over the next two year, one or more new models will be launched at each of its five assembly units in France. There will also be no compulsory redundancies in France.
President Sarkozy has also announced that local business tax will be abolished in 2010 and the government will be looking at the best way of “improving the underlying competitiveness of France's auto industry in order to improve its position within the European industry”.
PSA is now taking the following actions in reaction to the global recession:
• Speeding up payments to suppliers
• Raising its contribution to the automobile industry investment fund from €100 million (£87.3m) to €200m (£175m),
• Implementing the code of good practice and competitiveness developed jointly by the Committee of French Automobile Manufacturers (CCFA) and the Automobile Industry Suppliers' Liaison Committee (CLIFA)
• Negotiating a special agreement with "Groupement de la Plasturgie", the body representing suppliers of plastic components, that takes into account the specific characteristics of this industry.