PSA/Peugeot-Citroen announced it will cut 1, 500 jobs by 2014, as sales continue to fall in Europe.
Jonathan Goodman, a PSA spokesman, said that these cuts will be made besides the 8,000 announced in July, and that the employees who leave will not be replaced. The automaker announced its workers that the number of employees it has in France will drop 17% to 55,900 in 2014.
PSA will also shut down a plant near Paris, sell assets and negotiate a strategic partnership with GM to cut costs. The plant it plans to close builds the Citroen C3 subcompact and employs 3,000 workers. The automaker announced that by the end of this year it will have a net debt of 3 billion euro, compared with the prediction made in July of 2.5 billion euro.
With voluntary redundancies, “you are losing those people who can leave and you are left with the underachievers,” said Erich Hauser, an analyst at Credit Suisse Group in London.
On October 24th the France government offered PSA 7 billion euro in new bonds, in order to have greater influence over the automaker’s strategy. The money was used to offer customers competitive financing rates and also to keep down borrowing costs.