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PSA seeks 500 job cuts at French plant

PSA Rennes Plant

PSA/Peugeot-Citroen will offer workers at its plant in Rennes, France, early retirement benefits as part of plan aimed at reducing headcount at the site by about 10 percent.

PSA will allow staff in Rennes who are at least 55 years old to stop working and still receive 75 percent of their gross salary until they turn 60, Pierre Contesse, a FO union official at the Rennes plant in Brittany, said. Unions agreed to the plan, which is aimed at encouraging the departure of about 500 employees, he said.

This offer includes the opportunity to continue working elsewhere and specifically targets the Rennes factory, which has about 4,800 employees, because overstaffing means about 700 workers at a time are on furlough programs, Contesse said.

Pierre-Olivier Salmon, a PSA spokesman, declined to comment on personnel issues at the plant.

PSA builds the Peugeot 508 and Citroen C5 large cars in Rennes. European sales of the 508 fell to18,979 from 27,256 in the first five months, according to research company JATO Dynamics. Sales of the C5 dropped to 8,425 from 11,876 in the same period.

The program at Rennes is part of CEO Carlos Tavares’ wider Back in the Race turnaround plan which aims to end losses in Europe. Tavares’ strategy includes investing in hybrid drives, reorganizing South American and Russian units and trimming the model lineup.

To cut costs, the company is offering part-time work incentives in France to encourage 3,500 older workers to leave before the minimum retirement, head of human resources Philippe Dorge said in an interview in January.

The early-retirement offers come on top of PSA’s plan to eliminate 11,200 jobs in France, or 17 percent of the company’s domestic workforce, by the end of this year. The carmaker has also closed a plant at Aulnay, near Paris.

A three-year labor agreement signed in October freezes pay and sets terms for work-hour flexibility for remaining employees. In return, PSA agreed to refrain from large-scale firings.