Peugeot to cut jobs at its Sochaux plant image

PSA Peugeot Citroen will cut 300 jobs at its Sochaux factory in eastern France because it wants to reduce the plant’s output. The company’s trade union officials announced on Monday that the firings would start in November.

Unions stated that the job cuts will take effect on an assembly line producing two Peugeot models and the DS5 upscale sedan, adding that the labor representatives were announced of the job related changes at a works council meeting. The managers at the Sochaux plant in France, which currently has 10,800 workers, could not be reached for comments.

With Carlos Tavares as the new CEO, the Paris-based Peugeot plant is cutting industrial capacity to improve factory utilization rates while keeping under control inventories of parts, materials and unsold vehicles to free up much needed cash. The job cuts, which represent half of a shift at the plant, will reduce the assembly line’s daily production from 649 to 489 vehicles. The Sochaux factory’s best-selling model, the Peugeot 3008, is not due for replacement until 2016.

Guy Misere, an official with the centre-left French CFDT union commented on that, saying “That’s what concerns us. From here until 2016 it can only get worse.”

With its two world-renowned brands, Peugeot and Citroën, PSA Peugeot Citroën sold 2.8 million vehicles worldwide in 2013, 42% of these outside Europe.

By Gabriela Florea