Report Shows PSA is in ‘Difficult Situation’ image

A government report shows that PSA Peugeot-Citroen cannot rely only on cost cuts to reduce losses and the job cuts must not affect its development and research capabilities.

The French government appointed Emmanuel Sartorius, to examine PSA Peugeot-Citroen’s situation and find solutions in order to avoid cutting more jobs. In the report published on Tuesday, September 11th, Sartorius said that the automaker should have taken into consideration its overall production capacity before deciding to shut down its Aulnay facility near Paris.

Peugeot recently announced its plans to cut 80,000 jobs in France, besides the 3,500 announced last year, to shut down the Aulnay plant near Paris and shrink another facility in Rennes, all to cut costs and be able to survive the European crisis.

“This study has shown that PSA is currently in a difficult situation, resulting both from economic and structural reasons,” the report said.

Several days ago, the company was dropped from France’s Cac 40 blue chip index, an embarrassing blow for PSA which was a founding member of the Cac 40 benchmark index, 25 years ago. The automaker, which has been struggling with falling sales in recent years, will be replaced by Belgian chemicals group Solvay on September 24th.