Peugeot Mulls Cutting 10,000 Jobs, Sends Stock Soaring
Struggling French auto giant PSA Peugeot-Citroen might cut up to 10,000 jobs as it seeks to squeeze its operating costs, a union official said, sending its stock price soaring, The Economic Times said.
A leader of the Force Ouvrier labour union said Peugeot’s management would propose cutting 8,000-10,000 posts via a combination of reassignments, voluntary departures and forced redundancies.
Leaders of other labour unions at the company did not confirm the figure, saying no figures had been mentioned in recent meetings with management.
Peugeot is expected to present the new cost cutting measures at an extraordinary meeting with unions on July 12, with another scheduled for July 25.
There has been widespread speculation it may close its historic factory in the northern Paris suburb of Aulnay-sous-Bois, which employs about 3,300 people.
The speculation sent Peugeot stock climbing, with the share showing a gain of nearly three percent in afternoon trading.
The company had already plan to trim its workforce by 4,000 this year as it tries to reduce overcapacity amid a major slowdown in car sales in Europe linked to the eurozone debt crisis.
Sales of new cars fell 17.2 percent in France in the first five months of this year. The government said in mid-June that it was weighing measures to help the sector following a request from Renault.
Peugeot entered a global alliance with U.S. auto giant General Motors in February aimed at slashing costs for both and boosting their competitiveness in Europe.