Peugeot Sais Restructuring Plans Is an ‘Internal Matter’ image

PSA Peugeot Citroen said that its restructuring plan is an ‘internal matter.’

Peugeot, one the automakers worst hit by the European crisis, announced in July its plans to cut 8,000 jobs in France and close a plant near Paris, in an attempt to reduce losses. The country’s government said this plan is unacceptable and minister Arnaud Montebourg demanded a three-way meeting with the company and the labor unions beginning October 25th.

“We will also give an update on the progress of the layoffs procedure, which is an internal matter for the group between its management and staff representatives,” said chief executive Philippe Varin.

Both Peugeot and domestic rival Renault asked President Francois Hollande to cut welfare charges on workers, and therefore make manufacturing more competitive with foreign factories. The government appointed Louis Gallois to examine the matter and present alternative policy recommendations in November.

“I am proposing a win-win, a reduction of the social contributions weighing on production in return for investment,” the minister said. “This proposal will be part of the debate with Mr Gallois.”

In May, soon after his election, Hollande eliminated Sarkozy’s “Social VAT” plan, which was aimed at financing a cut to welfare charges with higher sales taxes.