PSA Peugeot Citroen to cut 1,500 more jobs by 2014 image

Europe’s second-largest carmaker, PSA Peugeot Citroen, plans to eliminate an additional 1,500 jobs by 2014 as auto sales in the region are on track to reach a 17-year low.

The cuts add to the 8,000 announced earlier this year and will be made by not replacing workers who leave the company, Peugeot spokesman Jonathan Goodman told Bloomberg. According to Christian Lafaye, the leader of the FO union, PSA Peugeot Citroen told its workers today that the number of employees in France will drop 17 percent to 55,9000 in 2014 as a result of the cuts.

The European auto market is about to drop in 2012 to the lowest sales volume since 1995, according to the ACEA trade group. Peugeot is also shutting down a factory on the outskirts of Paris, its 39-year-old plant in Aulnay-sous-Bois.

General Motors announced yesterday that it will close its Bochum plant in Germany as a result of poor sales in Europe, with Ford to shut three plants on the continent. At the end of last year, Fiat closed an Italian plant and announced last week that it will eliminate 1,500 jobs in Poland.

French Socialist government is preparing €7 billion ($9.2 billion) in loan guarantees for PSA Peugeot Citroen’s lending unit, Banque PSA Finance. The financial backing is being extended in exchange for greater influence, including a seat on the board.