France president says PSA’s plant closure and job losses are inevitable

Article by Anita Panait, on September 13, 2012

The French government, headed by President Francois Hollande, has changed its tone over the decision of carmaker PSA/Peugeot-Citroen to shut down its Aulnay plant near Paris and cut around 8,000 jobs. In July 2012, Hollande said in a televised interview that PSA's plan to close the factory and cut jobs "is not acceptable in its current form."

Two months later on Tuesday, a report commissioned by the French Industry Ministry said that given the flat European car market and PSA's excess capacity, the carmaker “must absolutely cut costs," adding that the closure of the Aulnay plant is “inevitable.” Hollande’s change of tone over PSA’s cost reduction plan marks a huge turnaround for the French president, who was elected in May on a promise to block a "parade of firings." Since then, the number of unemployed people in the country reached 3 million, marking a 13-year high.

Aside from PSA, several companies like Air France-KLM Group and retailer Carrefour SA have announced lay-offs. Sascha Gommel, an analyst at Commerzbank, said that shareholders perceive as a good thing the French government’s acknowledgment of the fixed-cost problem in PSA.

Gommel, however, warned of a political backlash on the recent development, noting that it was typical of any country when a company shuts down a plant. During a meeting with PSA union officials, Industry Minister Arnaud Montebourg said that the French carmaker was facing severe difficulties and needed to restructure, according to Franck Don, a CFTC PSA union official. PSA’s automotive division has been using up around EUR200 million a month for 2011, chief executive Philippe Varin divulged in July.

Topics: psa

If you liked the article, share on:

Comments

Login or Create new account to add a comment!

Recommended

The highlight of this year’s Consumer Electronics Show may be based on some of these keywords---connectivity, integration and partnership. Just like in the previous year, you’ve probably heard and read...
by - January 16, 2017
Less than three weeks to go and the Super Bowl LI – one of the most awaited and most watched sports events in television – will commence on February 5,...
by - January 16, 2017
New Tesla vehicles will have to pay when charging at any of the carmaker’s Supercharger stations once they exceed their annual limits. This comes as Tesla Motors announced revisions in...
by - January 16, 2017
Off-road driving with an open air vehicle provides another kind of experience for many off-road enthusiasts and fans. For this sake, Ford is planning to offer a version of the...
by - January 16, 2017
For those who love driving, future autonomous cars should be like the Toyota Concept-i that is drawing in a multitude of visitors at the 2017 Consumer Electronics Show in Las...
by - January 15, 2017
Facebook

Youtube Channel

Tip Us
Do you have a tip for us?
Did you film an important event?
Contact us
Newsletter
Subscribe to our newsletter!
Subscribe
Galleries