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Struggling Peugeot-Citroen cuts 8,000 French jobs, shutters plant

Job cuts and plant closure part of a restructuring plan to save $1.9 billion a year.


July 12, 2012
by The Canadian Press

PARIS: Struggling French carmaker PSA Peugeot-Citroen has introduced a drastic cost-cutting plan that will slash 8,000 jobs in France and close a factory north of Paris, as it faces diving sales in crisis-hit southern Europe.

Union members vowed to try to fight back and have planned protests.

Company management announced the job cuts and closure plan during a meeting with its worker representatives.

The company, which warns it faces a first-half loss of $858.2 million this year, is trying to save more than $1.9 billion as it struggles to compete in Europe’s fiercely competitive car market. It is suffering particularly amid a slump in sales in the recession-hit south of Europe. Its sales plunged 20% in Europe in the first quarter.

The restructuring plan includes the closure of Peugeot-Citroen’s Aulnay-sous-Bois factory, one of the biggest car plants in France and seen as a bastion of car-making and of autoworkers’ unions.

The company will also cut 1,400 jobs at its Rennes factory and 3,600 jobs in other French sites.

CEO Philippe Varin, grim-faced, told reporters that the company is losing about $100 million per month.

“No one will be left along the side of the road,” he pledged.

The company is hoping a new alliance with General Motors Corp. will allow it to return to long-term profitability.