Peugeot Started New Negotiations With Labor Unions image

PSA Peugeot Citroen has started a new round of negotiations with its labor unions regarding cost and labor issues.

The company said it was seeking a “new social contract . . . that will help to turn the company round and enable it to maintain its strong foundations in France”.

The negotiations started today, May 29th, and are to last until October, being aimed at building on a restructuring programme which is already under way, and includes the closure of the Aulnay plant and the loss of more than 6,000 employees. Today, the automaker’s share price dropped 5% after a report published by the media, that the company considers a capital increase.

Last year PSA reached a record loss of 5 billion euro and sales during the first quarter fell more than 10%. In 2012 the automaker spent around 200 million euro a month as it was struggling with low demand in Spain, Italy and France. The French government offered a 7 billion euro rescue package for the company’s financing arm, a move criticized by the European Commission.

Peugeot hopes to reach with its labor unions a deal similar with the one reached by Renault in March, which cut 17% of its workforce in the domestic market in exchange for a promise to boost output in France.

Source: ft.com