PARIS -- Struggling automaker PSA Peugeot Citroen offered Wednesday to maintain employment at its domestic plants if unions agreed to a wage freeze and more flexibility on hours.
"In case an agreement is signed, PSA Peugeot Citroen will promise to maintain its activity in France" through 2016, the company said.
The French government had to come to the rescue of the company's financing arm last year, and it suffered a 5.0-billion-euro (US$6.7-billion) loss last year as car sales in Europe hover near 20-year lows.
Peugeot, the biggest French carmaker and Europe's second-biggest after Volkswagen, shocked France in the middle of last year when it announced plans to cut 11,000 jobs between 2012 and 2014 and to shut two French plants as it tries to reduce its overcapacity.
It has also been holding talks with unions with the aim of reaching a deal to freeze wages in 2014 and limit rises thereafter, and introduce greater flexibility into working hours.
PSA Peugeot Citroen said it plans to manufacture 930,000 vehicles in its French factories this year and that this should rise to around 1 million by 2016. This level of production is sufficient to pledge to not close any other of its assembly and equipment factories, said the automaker.
It said it foresees launching one new model in each assembly plant, which would in effect guarantee their operation longer than 2016. This would entail 1.5 billion euros in investment, which the company said was considerably higher than the level over the past three years.
PSA Peugeot Citroen also said it would keep open all its research and development sites in France and 75% of the work in the country through 2016.
PSA Peugeot Citroen chief executive Philippe Varin said earlier this month he expects the European car market will begin to recover next year.
Copyright Agence France-Presse, 2013
