PSA Peugeot Citroen Offer Its French Employees an Early Retirement Plan image

PSA Peugeot Citroen has prepared an early retirement plan for its French employees, aimed at reducing costs and return to profit.

As Peugeot has started negotiations with labor unions in France, the automaker has proposed paid leave for as long as 18 months for employees who choose to retry earlier, according to Christian Lafaye, the leader of FO union at the French company.

Last year Peugeot reported an operating loss of 576 million euro and has begun to implement its restructuring plan which includes closing a plant near Paris and laying off 11,200 workers in France. Last year the automaker’s home country accounted for 40% of its production.

Peugeot’s total loss for 2012 reach a record 5 billion euro and sales during the first quarter fell more than 10%. 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: Bloomberg