PSA: Cutting Costs By €1 Billion Won’t Be Enough

PSA Peugeot Citroen has informed union officials that it must deepen its cost reduction plan beyond the €1 billion target announced in February because of the deepening slump in Europe's auto market, Reuters reports.

The original cost-cutting goal set last October was €800 million.

Jean-Francois Kondratiuk, a senior official at the Force Ouvriere union, tells the news service that CEO Philippe Varin also briefed staff on plans to shift output of the Peugeot C208 subcompact from its plant in Poissy near Paris to other factories in Europe.

The move would free Poissy to take on production of the Citroen C3 supmini currently made at a facility in Aulnay, France, according to labor leaders. They say that would set the stage for PSA to announce in late July that it intends to shutter the Aulnay plant.

Manufacturing chief Denis Martin declines to comment on the cost target. But he tells Reuters the company will unveil additional cost-cutting actions at a meeting of its works council in July. Martin says there are "structural problems" in Aulnay but also at PSA factories in Rennes and Sevelnord, France.