French car giant Peugeot Citroen today announced an €800m cost-cutting plan for next year, including up to 5,000 lay-offs amid a stagnating European car market.
"It's quite possible there will be an impact on the workforce," the company's chief financial officer Frederic Saint-Geours warned. Management is to inform unions on details at a meeting later today, with union leaders already slamming what they said was a "scandalous" plan.
The chairman of the company's board of directors Philippe Varin said: "This could concern 10% of the workforce." A spokesman clarified that the 10% could come from the around 50,000 people employed in Europe and not linked to production.
The company, France's largest car maker and Europe's second-largest after Germany's Volkswagen, employs over 205,000 people in the world, including 100,000 in France. It employs 167,000 people in Europe.
The new plan comes on top of a savings programme announced in 2009 that aims to save a total of €3.7 billion. The savings plan comes after the company announced that sales in its cars division were down 1.6% to €9.3 billion. However, overall sales were up 3.5% in the third quarter to €13.45 billion.
With two huge manufacturers, Peugeot Citroen and Renault, France's car industry is key to the country's economy and accounts for around 10% of the overall workforce.
French Industry Minister Eric Besson is to meet Varin to discuss the layoffs, his ministry said. The company said it expected growth in the European market to stabilise, but for sales to grow 7% in China, 6% in Latin America and 30% in Russia.
