Peugeot Restructuring Plan Delayed Due to Court Challenge image

PSA Peugeot Citroen had to delay the implementation of its restructuring plan due to a new court challenge.

PSA Peugeot Citroen has delayed the important works council meeting by more than one week to April 29th, postponing the automaker’s plan to close the Aulnay plant and cut 8, 000 jobs. The meeting was postponed after the Paris high court announced it will rule on April 26th on the case brought by the SUD union aimed at halting Peugeot’s plan.

“Under the circumstances, the company has decided to put off the works council meeting,” a Peugeot spokesman said.

Peugeot’s survival depends the automaker’s necessity to stem increasing losses by the end of 2013, therefore Chief Executive Philippe Varin tries to cut the company’s excess capacity and reduce the fixed costs amid the European auto market’s collapse. Although the majority of unions have approved the company’s restructuring plan, the SUD union considers that the terms imposed for workers to leave Aulnay are inadequate.

In 2012 Peugeot reported an operating loss of 576 million-euro ($747 million) and it expects to drop more as the auto industry in Europe will fall in 2013 for the 6th straight year. Last month Peugeot also cut two executives from its board as CEO Philippe Varin plans to end losses.