By on July 12, 2012

It’s been a long time coming, but PSA has finally done it; the parent company of Peugeot and Citroen is cutting 8,000 jobs and closing an assembly plant outside Paris, as the carmaker tries to cope with a sagging market and excess capacity.

Of the 8,000 jobs being shed, 3,600 are not related to assembly work, while 3,000 are expected to come from the Aulnay plant outside France’s capital. 1,400 will come from the Rennes plant, which builds larger vehicles like the Citroen C5 and Peugeot 508, models that have seen demand drop off in the wake of Europe’s economic downturn.

According to Reuters, PSA’s plants are burning $244 million a month, with cash flow not expected to turn positive until 2015. PSA’s first-half losses in 2012 amounted to $857.5 million. With significant exposure to troubled markets in Europe (i.e. the PIIGS countries), no low-cost brand (like Dacia for Renault) and an uncompetitive small car lineup for Peugeot, the company’s fortunes are hardly bright.

The move by PSA could be the catalyst for a wave of restructuring moves across Europe. Carlos Ghosn, head of Renault-Nissan, told Reuters in March that “The day somebody’s able to restructure heavily in Europe, it’s going to force all carmakers to do it,”  while Fiat CEO Sergio Marchionne has long advocated for a way to reduce capacity, via closing plants or finding additional ways to take advantage of it.

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11 Comments on “PSA Restructuring Includes Plant Closure, 8,000 Jobs Cut...”

  • avatar

    Best time to go on vacation in Europe is RIGHT NOW – while their economies are collapsing. My cousin just came back from Paris. Didn’t cost a whole lot.

  • avatar

    Guess their new socialist president is working out about as well as Mr. Hope & Change did here. But it’s all good, since executive pay is now capped in France.

    In light of this, how is the announcement of Renault’s plan to set up manufacturing in Algeria going down?

    • 0 avatar

      Haha! You’re blaming this on Hollande? He’s been in office just shy of 2 months.

    • 0 avatar
      30-mile fetch

      Hollande took office in May, giving him ~2 months to damage the French economy to the point where PSA has to cut jobs. Yes, I’m sure that is the exact cause of this.

    • 0 avatar

      Jesse Political clowns like Jpolicke make up their own reality. No doubt he blames Obama for the US economic crash of 2008, but Obama didn’t get in office until 2009, after 8 years of Bush-o-nomics, which was the worse US depression since the Great Depression, but never mind that. Also never mind 8 years of deficit spending by GWB and the Reps as well.

      • 0 avatar


        I know. I had a lengthier reply, but decided at the last moment to curtail it. ;^)

      • 0 avatar

        Right, never mind that the debt was increased in 3 years by more than GWB raised it in 8, and that it produced nothing in results. Challenger, I can read a calendar as well as you, so I’m not blaming Obama for the recession. I blame him for epic waste and failure.

        FWIW, I don’t blame GWB (although I don’t think much of his presidency) for the recession either, since the subprime crisis was the result of decades of Democratic tinkering with lending standards. The Dems made themselves out as heroes for making sure the “right” people got mortgages, and when the whole house of cards fell down the banks got blamed for being reckless and greedy.

        And while I certainly wouldn’t expect miracles from a French President after only 2 months in office, I nevertheless find it amusing that the priority was the executive pay cap. The politics of envy – I’m not getting any more, but that rich SOB gets less so I’m happy.

  • avatar
    el scotto

    I do appreciate TTAC reviews about vehicles that we can’t get in the US. PSA and other manufactures that don’t sell in US need to. Why? Thier competitors are selling in the US and making more money from US sales. We may be considered nitwits or barbarians by other countries but man, we sure buy a lot of stuff.

  • avatar

    maybe if Peugeot and Renault had maintained a presence in the north American market this would not have happened.But then they would have to build good cars…

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