Job cuts and restructuring at PSA Peugeot Citroen are unavoidable to safeguard its future.
That is the conclusion of an expert report into its financial state commissioned by the French government which blamed “economic and structural reasons” for company’s problems.
The report criticises the French car maker’s decision to close one plant near Paris and reduce capacity at another in western France saying it should have looked at other options such as its old, low capacity factory in Madrid, Spain.
The trade unions were dismissive of the report by Emmanuel Sartorius, a senior civil servant in the finance ministry who was appointed by the government to examine Peugeot.
Jean-Pierre Mercier of the left-wing CGT, France’s biggest industrial union and the most powerful at Peugeot, said: “Our lives and our jobs don’t really depend on the conclusions of this report. You know, we have no illusions about any reports compiled by experts.”
Peugeot Citroen is struggling with falling sales in Europe and too much production capacity.
In the first six month of this year it posted a 819 million euros net loss and sales fell 10.7 percent.
The expert report said Peugeot has been hurt by its dependence on the Italian and Spanish markets – which has been battered by the eurozone debt crisis – and its slowness in expanding internationally.
It stressed the company cannot rely solely on cost cutting to reduce its losses and its future “lies in an alliance with a major car maker”.