PSA Aims to End Losses at French Plants by 2016

PSA Peugeot Citroen has set a goal of breaking even at its assembly plants in France in 2016 by winning labor concession in its current contract talks.

Human Resources Director Philippe Dorge tells reporters the company seeks the ability to use additional part-time workers, a smaller permanent workforce and more flexible work rules to make its factories more competitive.

PSA says it aims to boost capacity utilization in France to 100% from last year's average of 75%. Dorge says some of the company's assembly facilities are operating at barely 50% of capacity now. PSA sales across Europe fell 13% to 176,700 vehicles in the first half of 2013.

Separately, The Wall Street Journal reports that the company is in preliminary talks about selling half or more of its finance arm to Spain's Banco Santander SA. Unidentified sources tell the newspaper that one alternative would be merging the unit, Banque PSA Finance, with Santander's consumer lending business.

The goal is for the Spanish bank to supply Banque PSA's financing needs, according to the Journal. It says such an arrangement would end the carmaker's reliance on the €7 billion loan guarantee the French government provided last year.

In exchange, PSA ceded one seat on its board to France and another to the company's unions. Another complication is the EU's investigation of whether the guarantee violates its fairness rules.