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EU formally questions French government assistance of Peugeot's finance arm

Recently, the finance arm of PSA/Peugeot-Citroën was in such debt trouble that it was pricing itself out of the car loan market. The rates it was paying to service its debt, which was rated one step above junk, were so high that it was forced to charge car-buying customers higher rates than they could find elsewhere. This was adding to Peugeot's already impressive woes by sending revenue out the door to competitors.
Two months ago a deal was worked out with the French government whereby the state would provide 7 billion euro ($9 billion USD) in bonds to guarantee the finance arm's loans. The French government could nominate someone to join the Peugeot board, Peugeot would guarantee more French jobs, and on top of that deal, other banks would provide non-guaranteed loans. The government would take no equity stake in the car company.
Although not yet finalized, the arrangement is meant to create some breathing room for Peugeot Finance to lower its interest rates for customers, and a government-nominated board member, Louis Gallois, was recently named to Peugeot's supervisory board. The arrangement was also openly questioned by at least three competitors: Ford, Renault - which is 15-percent owned by the French government after it received state aid - and the German state of Lower Saxony, itself a 15-percent shareholder in Volkswagen.

Volkswagen to add 50k jobs by 2018

Volkswagen still has its eyes set on becoming the top global automaker by 2018, and to get there, it's apparently going to need more boots on the ground. Automotive News Europe is reporting that VW is looking to increase its staff by 50,000 over the next five years - an increase of nine percent - which does not include an increase in its US dealer network.
According to the report, a majority of the growth will come from China where the automaker is also looking to double its production capacity in the same time frame. The Volkswagen Group is already expected to rival General Motors for the top sales spot in China this year, and such a rapid expansion in the region could make a good springboard for sales increases in other countries.

VW Group to split brands under four holding companies

The Volkswagen Group is planning a tremendous shift in its internal structure that will decentralize operations by splitting its 12 brands into four different holding companies. Here's the breakdown. Things will be split logically, considering the inter-sharing of parts, platforms, and engines. The Volkswagen brand, Seat, and Skoda make up a passenger vehicle division led by former BMW man Herbert Diess. Audi, which is tightly intertwined with Lamborghini and motorcycle manufacturer Ducati, will be managed by current Audi exec Rupert Stadler. Porsche and Bentley, which are already quite close, will be joined by Bugatti and run by Matthias Mueller. Finally, a commercial vehicles division will include Volkswagen Commercial, Scania, and Man. Former Daimler exec Andreas Renschler will take care of the big vehicles. The massive move, according to Automotive News Europe, is part of an internal VAG effort to move away from the structure established by ousted Chairman Ferdinand Piech, who favored a compact, but highly centralized, management structure to oversee the independent actions of the company's brands. Criticism of Piech's arrangement stemmed from the company's slow responses to changes in the market, ANE reports. The new structure should make for a more efficient, streamlined company that's better able to make crucial decisions. What are your thoughts? Should VAG decentralize, or did Piech have the right idea? Have your say in Comments.