French state to block Valeo boss 'golden parachute'

The French government yesterday vowed to oppose a "golden parachute" for the departing boss of troubled auto supplier Valeo at the centre of a fresh row over executive perks at crisis-hit firms.

Valeo's chairman and chief executive officer Thierry Morin, whose departure was announced on Monday, is to receive a €3.2 million severance payment, the French newspaper Liberation reported yesterday.

Government spokesman Luc Chatel said the state, which holds an eight percent stake in the car parts supplier, "will oppose the payment of this golden parachute at the shareholders' assembly".

"The state has helped this firm and I find this kind of remuneration shocking in the current climate," Mr Chatel told Europe 1 radio, calling on Mr Morin to "accept his share of responsibility".

Valeo reported a net loss of €207 million in 2008 after seeing sales plunge 27 per cent in the fourth quarter as the global economic crisis slashed demand for cars.

In December, the firm announced plans to cut 5,000 jobs over the coming year, including 1,600 in France.

Mr Morin ruled out renegotiating the layoff plan early this month.