PSA mulls production cuts at two French factories
PARIS (Reuters) – PSA/Peugeot-Citroen may close an assembly line at its Mulhouse plant in eastern France unless production picks up to more profitable levels.
The automaker will also review production at its Poissy plant near Paris.
"We've said there is a production threshold of 250,000 vehicles below which it's not viable to maintain two lines," a PSA spokesman said. "At Mulhouse this is an issue."
Mulhouse has two production lines and built 224,000 vehicles last year. The factory currently can assemble as many as 452,000 cars annually.
PSA is struggling with excess capacity left by Europe's crippling auto sales slump and has already closed its plant in Aulnay, near Paris.
The automaker has been preparing the ground for further politically sensitive cutbacks.
CEO Philippe Varin said in September that production line shutdowns were under consideration -- while avoiding site closures -- and told unions that Mulhouse and Poissy could be affected.
PSA builds the Peugeot 2008 subcompact crossover and Citroen C4 and DS4 compact models at Mulhouse. The Citroen C3 and DS3 and Peugeot 208 subcompacts are built at Poissy.
Recovering European markets mean the Poissy plant is now less likely to lose an assembly line, the spokesman said after French newspaper Le Figaro reported that one line would be closed or mothballed at each plant.
The company has forecast annual production of 190,000 to 230,000 vehicles at Mulhouse in the coming years, well below its own threshold for keeping two lines open, but a healthier 240,000 to 270,000 at Poissy.
PSA targets a 100 percent plant utilization rate across Europe by 2016.
Automotive News Europe and Bloomberg contributed to this report