In July we reported that PSA Peugeot Citroen had amassed a €700 million loss in 2012, were looking at cost-cutting measures to slash 8 000 jobs in France and completely close its major Aulnay-sous-Bois factory north of Paris. Unfortunately it seems the situation is now even more dire, as PSA Peugeot Citroen is to be dropped from France’s CAC 40 blue chip index.
In what must be an embarrassing demotion for the manufacturer that first listed on the CAC 40 in 1925, NYSE Euronext has decided to remove the share as of 24 September in favour of Belgian chemical and plastics maker Solvay SA.
PSA Peugeot Citroen, Europe’s second-largest car maker by volume after Volkswagen, has suffered a 13% fall in sales in the first half of the year. Its share price has plummeted 61% over the year, while the CAC 40 index has risen by 11% over the same period.
“When a stock is expelled from the Cac 40, it’s like a punishment,” said Christian Jimenez, president of fund manager Diamant Bleu Gestion in Paris. “It’s a signal that management has failed to maintain the level of performance of a company.”
It’s going to take more than the glamour of new products like the 208 GTI and Onyx to remedy this situation, but with the planned job cuts and factory closures, the company says it expects to break even by the end of 2014. Let’s hope the company doesn’t throttle back on R&D, as this could hurt their recovery in the medium to long-term.
