Report – PSA to cut another 1500 French jobs image

According to a union leader, PSA Peugeot-Citroen is considering cutting an additional 1,500 jobs in France in the face of continued production overcapacity.

The cuts would come on top of the 11,200 French positions to be eliminated by PSA by 2015 under its current restructuring plan, according to the union official.

“Our sources internally are telling us that management estimates the overstaffing in France at about 1,500 positions,” Jean-Pierre Mercier, a CGT union official at PSA, said. “They may plan to cut these jobs through voluntary redundancies.”

The CGT union has clashed in the last year with management, opposing the closing of PSA’s Aulnay plant on the outskirts of Paris. The union unsuccessfully filed suits to block CEO Philippe Varin’s restructuring plan to stem losses at the French manufacturer.

PSA plans a capital increase of 3 billion euros ($4.1 billion) after burning through 4 billion euros in the last two years as auto demand in its European home region sank. The new funding is equal to 78 % of PSA’s value and follows a share sale in March of 2012 to raise 1 billion euros in which General Motors bought a 7 % stake that it later sold.

PSA stock today gained as much as 57 cents, or 5.5 %, and traded up 4.9 % as of 12:51 p.m. in Paris. The shares have climbed 77 % in the last 12 months, valuing the manufacturer at 3.88 billion euros.

Via Automotive News Europe