French car maker PSA Peugeot Citroën has submitted a plan to labour union representatives to effectively reassign or eliminate, through early retirement, as many as 3,450 jobs in France next year, reports The Wall Street Journal.
The plan, outlined in a 233-page document seen by The Wall Street Journal, could affect about 4% of the group’s French workforce, and will be discussed by top management and union leaders at a meeting on Monday.
Peugeot is under pressure to further trim capacity in Europe and adjust to the continent’s diminished car market. But in a country where job cuts are politically sensitive, the part state-owned company is treading lightly with measures to reduce labor costs.
A company spokesman on Wednesday denied the company was considering cutting jobs. He confirmed the document was genuine but declined to comment further.
The document delicately outlines measures, including a plan where certain older employees would qualify for a long-term leave for up to two years at 70% of their full-time pay, while others could be retrained for jobs inside or outside the company.
Peugeot’s cautious approach is partly due to a “new social contract” it signed with the government and union leaders in 2013. The company experienced major backlash for an attempt to close a car plant in 2012.
To be sure, Peugeot also said in its plan that it promised to hire 2,000 young workers to replace those who leave or are reassigned.
Peugeot is in the midst of a transformation after years of heavy losses and a leadership change.
The company in February received a much-needed 3 billion-euro cash injection from Dongfeng Motor Group Co., a Chinese state-owned firm, and the French government, to keep it afloat.
Carlos Tavares, who took the helm as chief executive of the company this year, launched his 'Back in the Race' plan in April. The goal: To put the company back in the black by 2016 at the latest and to reach operating margins of 2% by 2018.