Unions have condemned PSA Peugeot Citroen plans to close its Coventry plant in the West Midlands with the loss of 2,300 jobs and vowed on Wednesday to fight to have the decision reversed, according to Reuters.
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PSA, which has been battling with sluggish sales at its main markets in western Europe, said on Tuesday it could no longer afford to carry on investing in the Ryton plant near Coventry due to high costs and the decision to close the plant in the traditional manufacturing heartland, follows last year’s collapse of MG Rover which cost 5,000 jobs, the report added.
The company yesterday said it would consult trade unions and provide a support package for staff with the aim of helping as many workers as possible find alternative employment but union leaders, who are to hold a series of meetings on Wednesday, told Reuters they wanted the closure plans reversed, and called the company’s actions “callous” and “absent of any social responsibility”.
“Make no mistake, we will be looking, as a matter of the utmost urgency, to explore with the company as well as with ministers ways to have this devastating decision reversed,” Tony Woodley, general secretary of the Transport and General Workers Union, told the news agency.
He was also reported to have attacked the UK government for what he described as a policy of “leave it all to the market madness” which had “massacred” British manufacturing.
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By GlobalData“We warned this government three years ago that the labour laws in this country which allowed people to be sacked and plants to be closed cheaply, quickly and easily needed to be tightened up,” Woodley told Reuters.
Local television news reports on Tuesday night showed both union and worker representatives condemning PSA for taking advantage of the ease with which British workers could be sacked and adding that such an event would not have occurred in France.
The government, which had offered Peugeot a 14 million pound grant in 2004 to redevelop the plant, told Reuters it was “extremely disappointed” by the news.
“We will do everything we can to support those affected, be it at Ryton or in the supply chain, and to help them find new employment or, where required, to retrain,” trade and industry secretary Alan Johnson reportedly said.
“We will be looking to Peugeot to assist us in this, including the exploration of options for the future use of the Ryton site.”
A third blow to the West Midlands, once the heartland of Britain’s car manufacturing industry, occurred in 2004 when Ford-owned Jaguar closed its Coventry assembly factory and consolidated production at nearby Castle Bromwich in 2004.
Reuters noted that PSA, which has been expanding output in low-cost eastern Europe, said it would close the Ryton plant in two phases – the factory’s two working shifts would move to a single shift in July 2006, with production halting by mid-2007.
It added that PSA chief executive Jean-Martin Folz told BBC television that Ryton had to close because its distance from suppliers on the European mainland meant its costs were higher than those of any other plant in the PSA group.
Modernising the factory to enable it to build a new model would have cost EUR250m (GBP173m pounds), he reportedly said.
“But even after these investments, Ryton would have stayed the most expensive plant in our organisation,” he said, according to Reuters, adding: “This is the only decision we could make. We have been looking at it from every angle, and there was no way to maintain an economic production in Ryton.”
