PSA May Seek Pay Freeze, Job Cuts at French Plant

PSA Peugeot Citroen has asked workers at its van factory in Sevelnord, France, to agree to a three-year pay freeze, more flexible work rules and the elimination of several hundred jobs in exchange for a promise to keep the facility open, Reuters reports.

The news service cites officials at two PSA unions who say the company is threatening to move production of the next-generation Peugeot Expert and Citroen Jump vans to a plant in Vigo, Spain. The labor leaders call the tactic "industrial blackmail" and suggest PSA aims to set a precedent at Sevelnord that workers elsewhere will be pressured to follow.

Analysts have opined that the van factory is vulnerable to closure because partner Fiat SpA plans to withdraw from the Sevelnord venture in 2017. PSA is reportedly seeking a new partner and is believed to be in talks with Toyota Motor Corp.

Separately, PSA denies an earlier Reuters report that the company intends to offer voluntary early retirement packages to a larger group of French workers than previously announced to meet its goal of eliminating 1,900 jobs in France. Reuters says only about 620 employees at Sevelnord have accepted buyouts.

The French job cuts are part of PSA's larger restructuring effort to cut €1 billion in costs and shed 6,000 employees in Europe this year. The job reduction total includes 2,500 positions at outside suppliers.