PSA Peugeot Citroen seeks state aid to prevent job loses image

The struggling carmaker PSA Peugeot Citroen wants government aid on top of wage concessions as a condition for averting a second French auto plant closure, Reuters reports citing internal sources with knowledge of the matter.

PSA Peugeot Citroen, Europe’s second largest carmaker announced last week it would cut 8,000 jobs and cease production at its historic Aulnay plant north of Paris.

Now the company is seeking tax breaks or other type of support for its northern French Sevelnord plant before committing to build a new vehicle there, according to three people briefed on the demand by company officials.

Speaking to reporters, Mr. Varin said he explained the painful situation in which the company has found itself, with sales in its core European markets plunging and unlikely to recover to precrisis levels for some years.

“I pledged that there will be no forced layoffs and that we will do what is necessary to reindustrialize the Aulnay site,” said Mr. Varin.

The government already has named an expert to look at Peugeot’s finances and will on Wednesday announce a programme to reboot the automobile sector — including “massive support” for high-tech and environmentally friendly vehicles.

On Wednesday, PSA is to tell trade unions where exactly it plans to make cuts, at the same time as it presents its half-year results.