Tag Archives: more harm than good

PSA-Dongfeng deal does more harm than good

The bailout that PSA/Peugeot-Citroen negotiated with the French government and its Chinese partner, Dongfeng Motor Corp., will prop up the French automaker in the short term. But the deal has shortcomings that could cripple PSA’s competitiveness in the long run.To be sure, PSA desperately needs money, and this deal provides it. Dongfeng and the French state each will pay 800 million euros ($1.09 billion) for a 14 percent stake in PSA. In the real world, nothing is free, and this agreement creates two big headaches for the French automaker.