Last week French carmaker PSA Peugeot-Citroen announced a cost-cutting measure to slash 8 000 jobs in France and completely close its major Aulnay-sous-Bois factory north of Paris. Should it close in 2014 as expected, it will be the first car plant to close in France in 20 years. The news outraged workers and prompted a response from the French government. In a Bastille Day interview, newly elected Socialist French president, Francois Hollande said the plan by PSA Peugeot-Citroen to rid so many jobs was unacceptable and something had to be done to re-industrialise France and its manufacturing sector.
Employees at the manufacturing facility staged a protest in front of the site, along with members from the autoworkers union. They say they will resume striking again on September 11th. PSA Peugeot-Citroen warns it faces a loss of €100 million per month (roughly R1 billion) which amounts to a first-half loss in 2012 of around €700 million (R7 billion), as the recession hit European car market stagnates.
In the latest reports in the Financial Times, French president Hollande told the newspaper, ”That shareholders were too hungry for dividends, when investments should have been the top priority”. Moreover, he added that when PSA Peugeot-Citroen delayed the announcement of the plant closure till after his election, the company engaged in ”a lie” by doing so. This is in reference to the company’s bailout it was given under the then-president Nicolas Sarkozy and the terms of its restructuring which should have been presented to the cabinet last month.
The French government is expected to consult with French labour unions this week before meeting with PSA Peugeot-Citroen Chairman Philippe Varin. Varin has been vocal since the announcement and its aftermath, insisting the company still requires job reductions in the face of its massive first-half loss.
PSA Peugeot-Citroen accounts for two-thirds of the world’s French car production and the company employs about 100 000 people in France and 209 000 people worldwide. The restructuring plan also includes cuts of 1 400 jobs at its Rennes factory and 3 600 jobs elsewhere in France.