FRANCE: Shocked president refuses to accept PSA's mass job cull plan

By Simon Warburton | 16 July 2012

French president, Francois Hollande, says he will not accept PSA Peugeot Citroen's plan to axe up to 8,000 jobs, branding the automaker's decision as a "shock" and "unacceptable".

Speaking this weekend on the occasion of France's Bastille Day celebrations in Paris - a tradition he has reinstated following predecessor Nicolas Sarkozy's decision to drop the national address - the newly-elected president said he was looking to PSA to reduce the number of redundancies and find alternative employment for those voluntarily leaving.

Despite widely flagging for some time PSA was looking to address its over-capacity issues, the sheer scale of job losses has provoked outrage in France, whose politicians have taken almost non-stop to the airwaves as the country attempts to digest the enormous impact on the manufacturer directly and its supply chain.

"This current plan is not acceptable in its [current] state, so it will not be accepted," said Hollande, whose comments were released by the Elysée Palace in Paris. "Apart from that, we have to ensure there are no forced redundancies at Peugeot.

"It's a shock. A shock for the staff who are coming to terms with the scale of it. It's a shock for the towns concerned - Aulnay and Rennes. And then it's a shock for suppliers who we often forget, lot's of businesses of all sizes in the automobile industry. Can the state stay indifferent? No."

The president did not reveal whether or not the state will directly inject finance to alleviate the worst of PSA's swingeing job cuts - and equally ruled out a re-introduction of any scrappage scheme - but confirmed an 'expert' would report to the cabinet by the end of the month on possible solutions.

Hollande added he would meet unions although he attempted to paint a wider picture of the French auto industry in general, particularly with regard to hybrid and electric vehicles.

"If the unions want to meet me, I will see them," he said. "But that won't solve the problem straight away. Consultation, expertise and a strategic plan for the automobile industry - as soon as 25 July at the cabinet meeting there will be decisions announced. Which ones? I am not going to prejudge.

"We know in France, there is an industry which has planned for clean vehicles, hybrids, let's make sure it is these models pushed forward more. What can the state do, local authorities, to help these projects? Well, [by] buying these clean, hybrid vehicles so we can provide a bit of momentum.

"We should also make an effort in research, innovation and ensuring credit financing as cars are often bought with credit, but not scrappage, we have already seen what that has done. It has cost taxpayers money to the benefit of vehicles at the low end of the range and which have often been made abroad."

Hollande ruled out intervening to stop the Aulnay site being closed but hinted he would like to see some form of industry continuing at the north east Paris factory, although he stopped short of specifying which one. 

PSA's plan will see the C3-producing plant at Aulnay close with 3,000 job losses, some 1,500 workers made redundant at its Rennes site and a further 3,600 disappear across the group, although some staff could relocate to other factories.