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EU formally questions French government assistance of Peugeot's finance arm

Recently, the finance arm of PSA/Peugeot-Citroën was in such debt trouble that it was pricing itself out of the car loan market. The rates it was paying to service its debt, which was rated one step above junk, were so high that it was forced to charge car-buying customers higher rates than they could find elsewhere. This was adding to Peugeot's already impressive woes by sending revenue out the door to competitors.
Two months ago a deal was worked out with the French government whereby the state would provide 7 billion euro ($9 billion USD) in bonds to guarantee the finance arm's loans. The French government could nominate someone to join the Peugeot board, Peugeot would guarantee more French jobs, and on top of that deal, other banks would provide non-guaranteed loans. The government would take no equity stake in the car company.
Although not yet finalized, the arrangement is meant to create some breathing room for Peugeot Finance to lower its interest rates for customers, and a government-nominated board member, Louis Gallois, was recently named to Peugeot's supervisory board. The arrangement was also openly questioned by at least three competitors: Ford, Renault - which is 15-percent owned by the French government after it received state aid - and the German state of Lower Saxony, itself a 15-percent shareholder in Volkswagen.

Recharge Wrap-up: VW CEO mulls battery factory, voters approve $201B in transportation funding

Volkswagen Group CEO Matthias Muller says that it would "make sense" for the automaker to begin producing its own batteries. As the company moves toward electrification, Muller says it would be a smart move to build a battery factory. "If more than a quarter of our cars are to be electronic vehicles in the foreseeable future then we are going to need approximately 3 million batteries a year," he says. Volkswagen has agreed to cut 30,000 jobs in its restructuring, while committing to creating 9,000 jobs in Germany through battery manufacturing and mobility services. Read more at Automotive News Europe. Election results show a desire for transportation funding. Earlier this month, voters in 22 states approved ballot measures adding up to $201 billion in funding for transportation projects, according to the American Road & Transportation Builders Association. California passed 15 transportation measures, including one in Los Angeles worth $120 billion for roads, bridges, and transit. The state of Washington secured $54 billion for light rail and buses. Atlanta approved about $4 billion for road and transit projects. Illinois and New Jersey passed measures to prevent the diversion of transportation user fee revenue to other industries. Read more from ITS International. The US Department of Energy (DOE) must hand over confidential documents about Fisker's bankruptcy. A Delaware federal judge ordered the DOE to give the documents – which concern a presentation by Fisker to the DOE in which it falsely claimed to meet milestones set forth in a government loan – to lawyers in a case in which investors claim Fisker lied to them about financial troubles. While the DOE has given over documents already, they were incomplete and heavily redacted. "I understand that such disclosures may have a negative impact on future DOE analyses," says US District Judge Sue Robinson. "but conclude nonetheless that under the circumstances at bar – the public money at stake, the Congressional hearings, and the fact that Fisker Automotive is now a defunct company – the balance of interests favors plaintiffs." Read more at Law360. Related Gallery Volkswagen I.D.

Peugeot will prove it doesn't offer cheater diesels

Our diesels are clean, really. That's the message from French automaker PSA/Peugeot-Citroen as it plans to go on the offensive in response to Volkswagen's diesel-emissions scandal. PSA will go out of its way to prove its diesels are as clean as advertised. The company is looking at disclosing "real-world" fuel-economy statistics as soon as next spring and will use an independent entity to vet the numbers, Automotive News Europe says, citing comments that PSA/Peugeot-Citroen financial chief Jean-Baptiste de Chatillon made to reporters this week. Such efforts may be vital, since roughly two-thirds of the vehicles Peugeot-Citroen sells in Europe are powered by a diesel engine. Last month, VW admitted that as many as 11 million of its diesel-powered vehicles were programmed with software designed to cheat emissions-testing systems. The news shook up the industry, especially companies that sell a good chunk of diesels. The EU itself may start instituting "real world" fuel-economy and emissions testing as soon as 2017. French regulators have said they may eliminate diesel-fuel subsidies that currently make diesel fuel cheaper to customers than gas. That adjustment may occur as soon as next year, since it's been pushed up in response to the VW scandal. Peugeot-Citron continues to reiterate that it has never installed software that was designed to cheat emissions-testing systems. Additionally, the automaker was more than a decade ahead of European Union mandates for engine components designed to cut soot emissions, so the company is hoping its track record makes a difference. It wants to be perfectly clear about that. News Source: Automotive News Europe-sub.req.Image Credit: Cletus Awreetus/Flickr Green Volkswagen Citroen Peugeot Diesel Vehicles vw diesel scandal France psa peugeot citroen