French government to probe PSA's job cuts
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RENNES, France -- The French government has appointed a special advisor to probe PSA/Peugeot-Citroen's plans to eliminate 8,000 jobs in France and close its car plant in Aulnay-sous-Bois, near Paris.
The probe will determine whether the government believes PSA's restructuring plan is necessary and whether the job cuts can be avoided.
The government-appointed expert heading the probe, Emmanuel Sartorius, met with PSA Chairman Thierry Peugeot in July to discuss the restructuring program.
The results of the investigation will be announced on Sept. 11. The government has not indicated what measures it might take if the report finds PSA to be at fault.
Industry Minister Arnaud Montebourg told reporters in July that the French auto industry must take measures to protect French jobs, but he was not more specific.
A PSA spokeswoman told Automotive News Europe that the probe was a typical course of action taken by the government whenever a large industrial group announces major job cuts in France.
"The study is part of a normal procedure that the government takes in such a case," the spokeswoman said. "The financial reasons behind the restructuring plan and its necessity are already apparent as PSA is a publicly traded company."
PSA has been hit hard by the euro-zone crisis, especially in its traditionally strong southern European markets, where car sales are plunging. The automaker posted a net loss in the first half and a 700 million-euro ($857.5 million) operating loss for the core carmaking division. Its manufacturing operations are burning 200 million euros a month, with cash flow not expected to turn positive until 2015, the company has said.
In July, Social Affairs Minister Marisol Touraine said PSA's job cuts were "unacceptable" from a company that had benefited from billions of euros in state support to the auto sector in recent years.
But a statement from Prime Minister Jean-Marc Ayrault's office did not challenge the planned closure of the Aulnay factory, which builds the Citroen C3. It said the government would verify that PSA delivered on a promise to help find jobs for the thousands of workers it is laying off.
You can reach Bruce Gain at bgain@crain.com.
