PSA Peugeot Citroen is in the last stages of agreeing with the unions at Ryton, Coventry, how much closure cash will be paid to the employees.
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But whatever the final figure is, it will be “more than would be paid under the conditions that apply in France,” said Jean-Martin Folz, the CEO of PSA. The present offer is based on a formula that an employee of 40 years of age with 15 years service will get 20 months pay.
Folz was speaking for the first time outside the clinical conditions of the closure announcement last month.
The occasion was the unveiling of the three new vans to come out of Europe’s biggest van plant at Atessa near Pescara in central Italy.
Under hard questioning, Folz admitted that the decision to keep Peugeot 206 production alive at Ryton for another three years was over ambitious.
“As a group, our target of four million cars has been too ambitious. And for the 206 there has been a quicker decline for B-segment cars than we had anticipated and there has also been unexpectedly strong pressure from the Koreans.”
He specifically denied that the Ryton tooling would move to the second factory that the group is building in China and where production of the 206 has just started in small numbers.
There is already sufficient capacity for 206 in France, China, Iran and South America and there is plentiful equipment to support it.
The 206 is already Peugeot’s most successful car ever with 5.4 million built in its eight year history.
Folz reckons that the early demand for the replacement car – the larger 207 – is very reassuring. In the first days of the 206, PSA was taking orders at the rate of 500 a day. The 207 rate is 700 a day and more importantly 40% of those orders are for hi-line cars. The equivalent for 206 was 15%.
Why was the UK a good place to assemble cars for Nissan, Toyota and Honda but not for Peugeot? Because all of the Japanese transplants have spent a long tome building (very expensively) a local supply infrastructure. But the suppliers for Ryton were always in France and the logistics costs made Ryton the most expensive factory in the group on a cars per man calculation.
He took issue with analysts who had argued otherwise, saying that there had never been like-for-like comparisons that took account of stamping plant or R&D employment in the comparator plants.
Meanwhile the van plant which is a joint venture between PSA and Fiat is hailed as a model for joint ventures in the motor industry.
In a press conference to mark the introduction of the Peugeot Boxer, Fiat Ducato and Citroen Jumper, Sergio Marchionne, the Fiat CEO and Folz confirmed that the two groups were working so successfully together that they had been examining more opportunities. One small initiative will be the assembly of PSA gearbox by Fiat in Argentina.
The Italian van plant is the largest LCV assembly operation in Europe and is expected to build well over last year’s total of 200,500 units this year.
Rob Golding
