PSA Balks at Supplier Bailout Scheme

PSA Group says it won’t participate in a €15 million ($17 million) bailout proposed by the French government to aid a small supplier of brackets and other stamped metal parts.

The company, GM&S Industry France, faces a bankruptcy hearing today that could threaten the company’s nearly 300 employees, Reuters reports. The company’s plight has attracted the attention of new French President Emmanuel Macron, who favors government intervention if necessary to protect jobs.

Finance Minister Bruno Le Maire has pushed for equal grants of €5 million each from PSA, Renault and the French government. Renault has complied and also agreed to buy €50 million worth of parts from GM&S over five years.

PSA pledged to buy €60 million in goods from the supplier over the same period. But the company tells Reuters it refuses to provide an additional bailout payment because it already has made “an enormous effort” to aid the company.

PSA also claims GM&S’s woes are due mainly to order cuts by the supplier’s other customers.