Sarkozy stops PSA’s decision to cut jobs

Article by Christian A., on May 4, 2012

The overcapacity of workers is hurting PSA/Peugeot-Citroen and Renault but they’re bound to job-security promises that they made to the French government, which helped them survive the economic crisis in 2009. As a result, they may fall further behind competitors such as Volkswagen.

Union representatives from a PSA factory last month expressed interest to meet with a spokesperson or anyone from President Nicolas Sarkozy's campaign team before the first round of elections begins. But they were stunned when Sarkozy himself made an appearance. Tania Sussest, a representative for SIA -- the largest union at the plant -- said that this is a “surprise.”

For 45 minutes, Sarkozy listened to the union members and then promised to meet PSA CEO Philippe Varin in support of the union's call to secure jobs. Sarkozy fulfilled his promise after just two days when he called the CEO to the Elysee Palace, his official residence. Sarkozy and Hollande agree that jobs should stay in France, especially as the country’s nation's jobless rate has hit its highest figure in 12 years.

The French statistics office said that the automobile industry directly employs about 233,500 people. The country's carmakers' association said that around 9 percent of France's workforce is linked to autos. Carlos da Silva, an analyst at IHS Automotive, said that there’s not much difference between the two candidates with regards to this issue. He pointed out that while the automobile sector had already been helped during the financial crisis, the focus now is to “shore up public finances” and this is not helping with car sales. Sarkozy is up against Socialist challenger Francois Hollande at the May 6 election.

In November last year, a CGT union official disclosed that PSA was intending to lay off 5,000 of its employees in France. Union representative Jean-Pierre Mercier at PSA's factory in the Paris suburb of Seine-Saint Denis had disclosed that around 1,900 French manufacturing jobs would be slash, along with another 3,100 in the information technology, sales and research and development fields.

In February 2012, PSA announced the creation of a major alliance with General Motors, with the American carmaker becoming PSA's second-largest shareholder (at 7 percent) after the Peugeot family.

PSA/Peugeot Citroen is a French multinational carmaker established in Paris, France in April 1976. In December 1974, Peugeot S.A. acquired a 38.2-percent stake in Citroen, and increased its holdings to 89.95 percent. This action eventually resulted to the birth of the PSA Group – with PSA referring to for Peugeot Societe Anonyme -- on April 9, 1976.

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