French government rejects Peugeot’s plan to cut 8,000 jobs
PSA Peugeot Citroën’s decision to cut 8,000 jobs and close the Aulnay plant has drawn a strong response from the French government, which says it cannot accept the move.
PSA Peugeot Citroën’s announcement that it will cut 8,000 jobs in France and close its Aulnay-sous-Bois assembly plant has triggered an immediate backlash from the French government. Social Affairs minister Marisol Touraine said the state “cannot accept” the scale of the redundancies and has commissioned an expert report into the company’s financial position and strategy.
The move, confirmed by Peugeot in July 2012, would see the Aulnay plant near Paris shut down altogether. The company said mounting losses in its automotive division had forced the decision. Peugeot had already warned of deteriorating results, with Moody’s putting the firm’s credit rating under review for a downgrade. The job cuts represent the largest single workforce reduction by a French carmaker in over a decade.
Government response and political pressure
Marisol Touraine, speaking on Europe 1 radio, criticised Peugeot for planning major redundancies after receiving €4 billion in state support in recent years. She said the government would defend the interests of workers and examine whether the company had explored all alternatives. The review is expected to take two weeks, with a meeting scheduled at the end of July to discuss the findings.
President François Hollande’s administration had pledged to create 150,000 state-aided jobs over five years, making Peugeot’s announcement a direct challenge to its employment promises. Unlike Renault, PSA Peugeot Citroën does not have the French state as a shareholder, limiting the government’s ability to block or influence the decision directly. The government’s options may be limited to public pressure and scrutiny of Peugeot’s use of state aid.
Peugeot’s financial pressures and recent developments
Peugeot cited deepening losses in its core automotive business as the reason for the cuts. The company had already announced plans to reduce its European workforce by 5,000 positions in late 2011, reflecting the scale of its difficulties as demand for new cars in Europe slumped. Moody’s review of Peugeot’s credit rating, announced in July 2012, highlighted growing concerns about the firm’s financial health.
The Aulnay plant, which produced models such as the Citroën C3, had been under threat for some time. Its closure would affect not only Peugeot employees but also local suppliers and the wider community around Paris. The decision comes as French new car orders have fallen sharply, putting further strain on domestic manufacturers.
What it means for workers and the industry
The planned redundancies and plant closure will have a direct impact on thousands of workers and their families, as well as on Peugeot’s supply chain. The government’s intervention signals that job protection remains a political priority, but the lack of a shareholding stake leaves its influence limited compared to its position at Renault. The outcome of the expert review and subsequent negotiations will determine whether Peugeot’s plans proceed as announced or face further revision.
- Peugeot’s 8,000 job cuts are the largest by a French carmaker since the early 2000s.
- The government has no direct control over PSA Peugeot Citroën’s board decisions.
- Aulnay’s closure would set a precedent for future plant shutdowns in France.
