PSA Cuts Small-Car Output

PSA Peugeot Citroen will reduce production of the Peugeot 208 subcompact hatchback by slowing line speed 33% at its plant in Poissy, France, starting on Wednesday, The Wall Street Journal reports.

PSA tells the newspaper it also will eliminate one of three shifts at the Poissy facility in December because of weak European car sales. The Journal notes that aligning production with demand is crucial for the company, which is trying to slow a cash outflow of €200 million per month.

PSA, which introduced the latest generation of the 208 in March, originally planned to sell 175,000 of the superminis this year. But analysts now expect 2012 sales of the 208 to reach only about 140,000 units. The car also is built in Trnava, Slovakia.

The company has notified 500 of the Poissy factory's 1,400 temporary workers that it won't renew their contracts because of this week's slowdown, according to the Journal. PSA says cutting a shift will shed an additional 600 temporary jobs.