Labor Union Fights Peugeot’s Restructuring Plan image

Peugeot’s employees protest against carmaker’s plan to lay off over 8,000 workers and close a plant near Paris.

“We have the power to make Peugeot back down, to preserve our jobs. We are a political bomb, a social bomb, and we intend to detonate,” said union leader Jean-Pierre Mercier.

The labor union plans long-term protest campaign and marches on the automaker’s headquarters. But Peugeot is not the only carmaker to face this problem. GM’s Opel division and Fiat in Italy said that the only solution to deal with overcapacity in Europe is to close under-used factories and lay off workers.

Peugeot’s restructuring plan includes closing a plant near Paris and lay off 8,000 employees by 2014. In 2011 the company lost 200 million euro ($246 million) and sees itself in the impossibility of finding another solution to this problem.

“We’re indebted and unable to earn as much money as we’re spending,” said Frederic Saint-Geours, in charge of brands at Peugeot. “That’s why we had to take this decision.”

But Europe has a long history of carmakers facing huge obstacles when it comes to restructuring. France’s President Francois Hollande has already named the automaker’s plans ‘unacceptable’. The plant in Aulnay-sous-Bois has brought a change in a region affected by high unemployment and crime.