EU and US vehicle industry woes deepen

Paris and Berlin - A fresh round of job cuts at Peugeot Citroën underscored the vehicle sector's woes yesterday as France's President Nicolas Sarkozy vowed to help the struggling industry. A €2 billion (R26 billion) rescue package for the industry is planned by the European Investment Bank, according to a German government paper obtained by Reuters, but in the meantime sales are falling and car makers are retrenching.

Peugeot Citroën, Europe's second-biggest car maker, which trails only Volkswagen in terms of European sales, said it planned to cut 2 700 jobs across its sites in France, where it had a workforce of 114 000 last year. It forecast sales volumes for the market as a whole would drop 17 percent in the final quarter of this year in main European markets and by at least 10 percent next year.

by C Jacobs  and G Hellen

President-elect Barack Obama is "on track" to nominate Hillary Clinton as secretary of state within a week, according to US media reports.


Paris and Berlin - A fresh round of job cuts at Peugeot Citroën underscored the vehicle sector's woes yesterday as France's President Nicolas Sarkozy vowed to help the struggling industry. A €2 billion (R26 billion) rescue package for the industry is planned by the European Investment Bank, according to a German government paper obtained by Reuters, but in the meantime sales are falling and car makers are retrenching. Peugeot Citroën, Europe's second-biggest car maker, which trails only Volkswagen in terms of European sales, said it planned to cut 2 700 jobs across its sites in France, where it had a workforce of 114 000 last year. It forecast sales volumes for the market as a whole would drop 17 percent in the final quarter of this year in main European markets and by at least 10 percent next year. Sarkozy said France would not leave large parts of the economy vulnerable to the economic crisis, picking out the struggling car sector for special mention. "I will not leave entire sectors unarmed in the face of the crisis. I am thinking about the automobile sector," he said in a speech on a visit to aerospace supply company Daher near Paris.Meanwhile, the German government document said the EU was proposing a public-private partnership for the vehicle sector to boost green technologies along with supply-side measures such as lower taxes on environmentally friendly cars. Senior EU officials had said on Wednesday that European car makers might need financial aid from the bloc and its governments, with General Motors unit Opel seen as a possible emergency case. European car companies have asked for €40 billion in soft loans, while Opel is negotiating aid with the German government. Its parent, General Motors, and other car makers are seeking a US government bailout. However, chances for the bailout dimmed as Democrat leaders expressed deep scepticism on Wednesday that the talks would lead to an acceptable compromise. A last-minute plan being crafted by Republican senators would provide $25 billion (R255 billion) to bail out US car makers, but congress has at most two days left of its post-election session. Without a deal in that time, any bailout is likely to have to wait until the new Barack Obama administration takes over in January.

 BBC News