Steven Erlanger of The New York Times reports:
[French President Francois Hollande] even created a whole Ministry for Industrial Recovery, led by Arnaud Montebourg, to stop factories from closing. But now Europe is in recession, and Peugeot, hemorrhaging money, has announced plans to cut spending by $1.85 billion by 2015, lay off 8,000 workers and shut a major factory at Aulnay-sous-Bois, near Paris. And Mr. Hollande is learning how hard it is to be a French Socialist in a European Union that demands budget cuts and debt limits, endorses free trade and has rules against favoring national manufacturers.
After the layoffs were announced, Mr. Hollande retorted that the plan “is not acceptable, and therefore it will not be accepted.” Mr. Montebourg, a foe of globalization and a fierce talker, accused the company of “lies” and “dissimulation,” and called the news “a shock for the nation.”
Yet it is not clear what the government can actually do. PSA Peugeot Citroën is a private company facing global competition in a cutthroat business with its main market in a recession, and France is an expensive place to make anything, let alone the low-cost cars that make up a large part of its business. Part of the company’s problem, in fact, is that it has tried to keep jobs in France.