Business

After two centuries, Peugeot family cedes control

Philippe Varin is retiring as CEO of PSA Peugeot Citroën, long a family-controlled company.
PASCAL ROSSIGNOL/REuters
Philippe Varin is retiring as CEO of PSA Peugeot Citroën, long a family-controlled company.

PARIS — The family business that grew into PSA Peugeot Citroen got its start more than 200 years ago, making goods like pepper mills, bicycles, and whale-bone corsets on its way to becoming the largest automaker in France. This week the Peugeot family, one of the country’s wealthiest, agreed to give up control of the company it had been running for eight generations.

As part of a $4.1 billion plan to raise new capital, announced Wednesday, the family will reduce its holding to 14 percent from just over 25 percent. That opens the way for Dongfeng Motor, a big Chinese car company, and the French government to each buy 14 percent stakes.

The company, which ranks second to Volkswagen in Europe and employs 90,000 people in France, has been losing money and market share along with the sharp downturn in the European auto industry.

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After General Motors sold its 7 percent investment in Peugeot last year, the company turned to its Chinese partner and President Francois Hollande’s Socialist government, in the hope that the money would come without too many strings attached.

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The investment of public money by Hollande’s government is aimed at preserving the factories and jobs in France.

New York Times