Peugeot Unions Back Job-Cuts Plan as European Deliveries Decline

PSA Peugeot Citroen (UG), Europe’s second-biggest carmaker, received the backing today from a majority of its unions to move forward with a plan to eliminate 11,200 jobs and close a French factory.

Five of the six main Peugeot unions favored the proposal to cut 17 percent of the carmaker’s French workforce and the shutter a plant on the outskirts of Paris, Franck Don, the head of the CFTC union at Peugeot, said today in a text message. Eighteen of the 20 workers representatives at the works council approved the plan, he said.

The approval ends a nine-month long effort to push through the reorganization, which the automaker first announced last July. A French court ruled last week against a legal effort by some labor leaders at the automaker to block the restructuring.

Peugeot, which reported a 576 million-euro ($754 million) operating loss in 2012, said last week that first-quarter revenue fell 6.5 percent to 13 billion euros as the European market sinks for a sixth straight year. The region’s car sales may drop 5 percent in 2013, the automaker forecasts.

A Paris court on April 26 rejected a bid by two Peugeot unions that sought to block the reorganization on the basis that the severance packages accompanying the job cuts were insufficient for employees and that the legal framework for such measures hadn’t been respected by the carmaker.

Chief Financial Officer Jean-Baptiste de Chatillon said last week that the Aulnay site near Paris, scheduled to be shut next year, may be closed as early as 2013 as strikes disrupt production. A further contraction in Europe’s auto market in 2014 may also make new savings measures necessary, he said.

Manufacturing at Aulnay has been hampered since January because of a strike by the CGT labor union. The plant is now making 40 to 50 vehicles a day, Anne-Laure Desclesves, a Peugeot spokeswoman at the site, said today by phone. The factory’s daily capacity is 250 cars.

To contact the reporter on this story: Mathieu Rosemain in Paris at mrosemain@bloomberg.net

To contact the editor responsible for this story: Chad Thomas at cthomas16@bloomberg.net

Press spacebar to pause and continue. Press esc to stop.

Bloomberg reserves the right to remove comments but is under no obligation to do so, or to explain individual moderation decisions.

Please enable JavaScript to view the comments powered by Disqus.