PSA to Shut Down French Assembly Plant

By Logan Utsman on Thursday, July 12th, 2012

The automotive powerhouse built upon Peugeot and Citroen (PSA) isn’t entirely immune to hardship and proof was recently announced. The company’s Aulnay car plant located near Paris, France will soon fully shut down operations due mainly to financial losses. On top of the closure, PSA’s other factory in Rennes, France will see reduced output while the automaker begins to cut expenses and jobs. Production of larger Peugeot and Citroen models will be cut in favor of smaller variants and PSA is working hard to correct the business mishap.

“The depth and persistence of the crisis impacting our business in Europe have now made this reorganization project indispensable in order to align our production capacity with foreseeable market trends,” said PSA CEO Philippe Varin in a statement to Automotive News. For the first half of 2012, PSA will see a loss of $857 million and mentioned a cash burn of about 200 million euros a month since mid-term 2011. The alliance has French plants that are hemorrhaging money and in order to breakeven by the end of 2013, a plan to consolidate production has been made.

The first move to have production at a singular plant will be the closure of the Aulnay factory. The halt will happen in 2014 and with it, thousands of jobs will be cut across the company. Aulnay itself employes nearly 3,000 workers and even with Rennes taking over some responsibility, it too will cut down its workforce by about 1,4000.

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