Skip navigation
Newswire

PSA Considers Curtailing Assemblies at French Plants

By Laurence Frost

PARIS, Nov 21 (Reuters) - PSA Peugeot Citroen may close an assembly line at its Mulhouse plant in eastern France unless production picks up to more profitable levels, the company said on Thursday.

The carmaker will review the second production lines in Mulhouse and Poissy, near Paris, a company spokesman said, although the latter is less likely to be shut.

"We've said there's a production threshold of 250,000 vehicles below which it's not viable to maintain two lines," the spokesman said. "At Mulhouse this is an issue."

Decisions will be announced by plant management at sites affected by the cutbacks, he said.

The Paris-based carmaker, which has already closed one assembly plant as it struggles with excess capacity left by Europe's crippling auto sales slump, has been preparing the ground for further politically sensitive cutbacks.

Chief Executive Philippe Varin said in September that production line shutdowns were under consideration - while avoiding site closures - and told unions that Mulhouse and Poissy could be affected.

Recovering European makrets mean the Poissy plant is now less likely to lose an assembly line, the Peugeot spokesman said on Thursday, after French newspaper Le Figaro reported that one line would be closed or moth-balled at each plant.

The company has forecast annual production of 190,000-230,000 vehicles at Mulhouse in the coming years, well below its own threshold for keeping two lines open, but a healthier 240,000-270,000 at Poissy.

Peugeot lost 5 billion euros ($6.73 billion) last year but said on July 31 it expected to beat its 2013 goal of halving its industrial cash burn to 1.5 billion euros.

Varin told analysts the same day that further cuts to production capacity were on the way as the company targets a 100 percent plant utilisation rate across Europe by 2016. ($1=0.7428 euros) (Reporting by Laurence Frost; Editing by Greg Mahlich)