Report – PSA seeks some pay reductions from workers image

According to a person familiar with the matter, Europe’s second largest car manufacturer will ask French workers to cut overtime pay and accept more flexible working conditions in order to further slash fixed costs.

The source, under condition of anonymity, said the company would meet with unions later today to propose cutting additional overtime pay by 20 to 25% while also lowering added money for working night shifts by 3% to 15%.

Peugeot, which posted a first-half operating loss of 510 million euros in its automotive division, plans to eliminate 11,200 jobs in France by 2015 and will close the Aulnay factory on the outskirts of Paris. Chief Executive Officer Philippe Varin pledged to cut the manufacturer’s cash-consumption rate by 50 percent in 2013 after burning through 3 billion euros last year.

The French automaker is seeking about 600 million euros ($792 million) in annual savings by 2016 through its current restructuring plan and these additional measures, the person said.

The Peugeot and Citroen brands had combined European market share of 11.1% in the first half of 2013, a decline from 12% a year earlier, according to figures from the ACEA carmakers’ lobby.

Via Bloomberg