Peugeot to Take Over Fiat Stake in French Plant

In a move that comes after PSA Peugeot Citroen (IW 1000/43) entered a global alliance with General Motors in February aimed at slashing costs for both and boosting their competitiveness in Europe, Peugeot said Wednesday it will take over Fiat's stake in their Sevelnord joint production venture in northern France.

It said Sevelnord would however continue to produce light commercial vehicles for the two groups until the end of 2016. Italy's Fiat said last year it wanted out of the venture.

The plant, which employs 2,800 people, produces vans and multi-purpose vehicles.

Union sources said in March that PSA was in talks with Toyota of Japan on joint production at Sevelnord, but on Wednesday a union said there was no partner in sight.

"Management confirmed that there is no (new) partner and that Fiat is pulling out by the end of 2012, but will continue to buy vehicles until the end of the 2016," the CGT union said after a works council meeting with management.

Struggling PSA has said it plans 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.

Copyright Agence France-Presse, 2012