PSA Peugeot Citroën on Monday announced an average pay increase of 1.9% had been agreed with its workforced after a second pay round meeting on 21 January.

"In a 2009 business environment shaped by the crisis that has struck the automobile industry and with a still very uncertain outlook for 2010, PSA Peugeot Citroën has enhanced employee purchasing power," the automaker said in a statement, noting that French price inflation for the past year was estimated at 0.8%.

From 1 February it will pay a company-wide salary increase of 1%, with an increase of at least EUR18 for operators and administrative employees, representing 1.25% of the minimum base salary, 0.8% for technicians and supervisors, and an approximately 0.6% increase in the merit and promotion raise budget (excluding seniority). For technicians and supervisors, this budget has been increased by 0.8% to cover promotions related to the implementation of the new agreement on career development. It also increased the minimum guaranteed annual compensation (RMAG) for a full-time employee to EUR20,500 a year.

The average total increase in base salaries (including seniority) will come to 1.9%.

"The group’s compensation policies have led to enhanced employee purchasing power across all wage categories – in particular among those at the lower end of the pay scale – while also ensuring equal opportunity, especially between men and women and for older employees," the automaker added.

It plans to hire 7,300 young people in France during the year and is increasing its training budget for 2010 by 30%. PSA also said it would continue to invest in research and development to ensure the group’s future and "preserve manufacturing operations, and related jobs, in France as part of a commitment to social responsibility".