Peugeot Mulling New Cost-Cutting Measures, Unions Say

Struggling French auto giant PSA Peugeot-Citroen (IW 1000/43)  soon will adopt new cost-cutting measures, the company chairman told union members on Thursday, amid concerns that an emblematic car plant near Paris could close.

Philippe Varin told unions at a committee meeting that "additional measures were necessary" to turn the company around, a union representative said, while a Peugeot spokesman refused comment.

Meanwhile, several hundred Peugeot workers protested in front of the group's Paris headquarters, worried that the factory in the northern Paris suburb of Aulnay-sous-Bois, which employs about 3,300 people, could fall under the axe.

The company announced an extraordinary work's council meeting for the end of July and said any announcements regarding the future of the company would be made then.

The Aulnay plant closure is widely understood to be under consideration, though Peugeot has come under immense pressure from the newly installed Socialist government to avoid mass job cuts.

The influential French CGT trade union last June unveiled an internal Peugeot document that spoke of closing the Aulnay plant in 2014, but the company denied its content is still pertinent.

The Aulnay factory was set up in 1973 after iconic Peugeot units within Paris were moved to the suburbs.

Sales of new cars fell 17.2% in France in the first five months of this year. The government recently said it is weighing measures to help the sector following a demand from Renault SA (IW 1000/73).

Peugeot entered a global alliance with General Motors Co. (IW 1000/13) in February aimed at slashing costs for both and boosting their competitiveness in Europe.

Copyright Agence France-Presse, 2012