Struggling French carmaker PSA Peugeot Citroen has raised its target for the savings it wants to make this year according to union officials taking part in talks with management.
Chief Executive Philippe Varin reportedly told workers’ representatives that its original target – to cut one billion euros – “will not be enough” and new cost-cutting measures are to be presented at works councils in the near future.
The automaker is also briefing workers on plans to reduce production of the Peugeot 208 small car at Poissy, west of Paris, by at least one third, senior Force Ouvriere union official Jean-François
The move is seen as preparing the way for the closure of Peugeot’s long-threatened factory in the northern suburb of Aulnay-sous-Bois.
Under the plan, Peugeot will increase 208 production at sites in Mulhouse, eastern France and Trnava, Slovakia. That will allow Poissy to ramp up production of the equivalent Citroen C3 model currently assembled at Aulnay, unions say.
“By reducing the 208 (at Poissy) you can increase output of the C3,” said Jean-Pierre Mercier of Peugeot’s main CGT union. “All the conditions are now in place for Aulnay’s closure to be announced at the end of July.”
Peugeot is scheduled to publish its first-half financial results on July 25.