Peugeot could slash 5,000 jobs to cut costs in 2012

French auto giant PSA Peugeot Citroen yesterday announced an €800 million cost-cutting plan for next year, including up to 5,000 lay-offs amid a stagnating European car market.

“It’s quite possible there will be an impact on the workforce,” the company’s chief financial officer Frederic Saint-Geours warned during a teleconference announcing the plan.

The chairman of PSA’s board of directors Philippe Varin said: “This could concern 10 per cent of the workforce.”

A spokesman clarified that the 10 per cent could come from the around 50,000 people employed in Europe and not linked to production.

The company, France’s largest automaker and Europe’s second-largest after Germany’s Volkswagen, employs over 205,000 people in the world, including 100,000 in France. It employs 167,000 people in Europe.

The new plan comes on top of a savings programme announced in 2009 that aims to save a total of €3.7 billion.

The savings plan comes after the company announced that sales in its cars division were down 1.6 per cent to €9.3 billion. However, overall sales were up 3.5 per cent in the third quarter to €13.45 billion.

CGT union representative Bruno Lemerle slammed the savings plan as “scandalous”.

“Logically when the results are good, the company should employ people, try to develop,” Lemerle told AFP, pointing to the increased overall turnover figure.

“Our workload is excessive as it is, we don’t need a reduction in the workforce,” he said.

With two huge manufacturers, PSA and Renault, France’s auto industry is key to the country’s economy and accounts for around 10 per cent of the overall workforce. Industry Minister Eric Besson is to meet Varin to discuss the layoffs, his ministry said.

Saint-Geours said the company expected growth in the European market to stabilise, but for sales to grow seven per cent in China, six per cent in Latin America and 30 per cent in Russia.