Tie-Up with GM Could Allow PSA to Close French Plant

General Motors Co. plans to make future versions of the Citroen C5 and Peugeot 508 cars at its plant in Russelsheim, Germany, Frankfurter Allgemeine Zeitung reports.

Speculation about such a move has been circulating since the two companies announced their product and purchasing alliance in February.

But labor officials now tell the newspaper that shifting production of the two models from PSA's factory in Rennes, France, will allow the carmaker to close that facility. Those sources include a senior German union leader Armin Schild.

For its part, PSA is expected to build the next-generation Opel Zafira small MPV for GM at an unidentified plant. Opel calls the report "pure speculation."

Opel is planning to offer severance packages to 1,500 workers in Russelsheim and a factory in Zaragoza, Spain, according to FAZ. Opel says it is offering buyouts only to a limited number of employees at those facilities, including about 100 at the German facility.

Separately, Opel managers are scheduled to present a restructuring plan to the company's supervisory board on Thursday.

Reuters reports that Opel is pursuing several new methods of trimming labor costs. The news service cites an anonymous source who says Opel seeks to replace permanent employees who leave with temporary workers and shift non-production employees to a lower wage scale.

Reuters notes that BMW, Daimler and Volkswagen have already reduced pay for such employees as logistics staffers and security guards.