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PSA, Unions Near Deal to Cut Costs
PSA Peugeot Citroen is close to a critical agreement with its unions to reduce operating costs in France, Bloomberg News reports.
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PSA Peugeot Citroen is close to a critical agreement with its unions to reduce operating costs in France, Bloomberg News reports.
The news service says unions representing more than half of PSA workers in the country have agreed to support the company's plan to freeze wages and reduce overtime pay. In exchange, PSA would pledge to invest in French factories and give them more models to build.
Unnamed sources tell Bloomberg the labor deal is a necessary step in PSA's pursuit of a plan to raise €3 billion or more by selling 20% stakes in itself to the French government and China's Dongfeng Motor Corp. PSA's board will discuss the options today ahead of the company's third-quarter earnings report tomorrow, according to the news service.
General Motors Co., which acquired a 7% stake in PSA in March 2012, could exercise its right to exit the partnership if control of the company shifts. A Bloomberg source notes that an equity sale to Dongfeng might prompt GM to leave because the American company has a strong partnership in China with Dongfeng rival SAIC Motor Corp.
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