PSA Peugeot Citroen said Friday it would invest 750 million euros (US$942 million) to produce a new light commercial vehicle at its Sevelnord plant in northern France.
The move follows union concessions and ensures the plant, which was under threat after Italian carmaker Fiat pSpA (IW1000/81) pulled out of a joint production venture earlier this year, will remain in operation.
The investment includes 400 million euros in research and development on the new vehicle.
"This is an important decision for the plant and for the group. We identified the economic conditions which were necessary to continue making light commercial vehicles and to ensure that the plant remains in operation," Chairman Philippe Varin said.
"Those conditions are now met, which is very good news," he said.
The statement said steps had been taken towards "improving the competitiveness of the plant."
Negotiations with representatives of the plant's 2,800 workers saw unions agree to more flexible management of their working hours and time off.
Struggling with losses from failing European sales, Peugeot this summer shocked France by announcing it planned to cut 8,000 jobs and close its historic Aulnay plant near Paris.
Copyright Agence France-Presse, 2012
