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.