PSA to Build Vans in France for Toyota

PSA Peugeot Citroen has agreed to make commercial vans for Toyota Motor Corp. at a factory in Sevelnord, France, starting in the second quarter of next year but only if the plant's 2,700 hourly workers agree to concessions.

PSA and its unions express confidence that they will reach a deal. Labor officials tell Agence France Presse the Toyota pact could save 300-400 jobs in Sevelnord.

The French carmaker will initially supply a Toyota-badged midsize delivery van for the European market based on the Peugeot Expert and Citroen Jumpy models already produced in Sevelnord. The partners also plan to jointly develop future midsize light commercial vehicles to be built by PSA.

The companies say the agreement, which is expected to run beyond 2020, does not include an equity tie-up or joint van production. Toyota and PSA already operate a minicar joint venture in the Czech Republic.

The French carmaker began seeking a new partner at the Sevelnord facility last year after Fiat SpA declared it would withdraw from the vanmaking venture in 2017. Toyota has been considered the likeliest candidate. PSA said earlier this month it intends to dissolve the Fiat partnership by year-end but will continue to produce the Fiat Scudo van through 2016.

PSA asked the Sevelnord unions in May to agree to a pay freeze, flexible hours and accept possible job cuts in exchange for keeping the plant open, according to labor leaders.