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Peugeot unions agree to early exit from French plant

Striking workers of the French car manufacturer PSA Peugeot Citroen hold a banner that reads: ‘No to the Closure of PSA Aulnay’ in Paris Feb. 14, 2013.

Christophe Ena/AP

PSA Peugeot Citroën unions agreed to let the French car maker start to move workers from its troubled Aulnay plant, effectively beginning the wind-down of the site a year ahead of its scheduled closure.

The works council approved the transfers to another Paris area plant in response to violence and threats against staff ignoring a strike call by the left-wing CGT, said Denis Martin, executive vice-president of industrial operations.

The interruption of the plant's daily output of 440 cars may hit Peugeot with higher-than-expected restructuring costs unless the situation is resolved soon.

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Despite slumping French and European auto demand, waiting lists for the Citroën C3 subcompact assembled in Aulnay have increased as a result of the stoppages, Peugeot said.

"A certain amount of lost production was anticipated in the plan, but if this drags on much longer it will start to have an impact," a company official said.

Production remains at a standstill following further damage to equipment inflicted on Thursday by a "violent minority" of strikers, Mr. Martin told reporters at a briefing in Paris.

"We won't be drawn into this cycle of violence," he said.

Under Peugeot's restructuring plan to cut 8,000 jobs nationwide, half of Aulnay's 3,000 work force were set to be transferred next year to the Poissy plant west of the capital.

The transfers will now go ahead at the request of other unions, beginning in early March at a rate of 50 workers per week, Mr. Martin said.

The early departures were backed by the CFDT, CFTC, CGC, FO and SIA unions, with only the increasingly isolated CGT voting against, workers' representatives said.

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The CGT has consistently denied reports of violence and sabotage.

"Management doesn't know what to invent next to hide the fact that the strike is gathering strength and staff have rejected the restructuring en masse," a CGT spokesman said.

The decision on transfers comes amid escalating tension between strikers and staff still reporting for duty at the factory north of Paris.

The French government named a mediator to broker talks as the mood worsened at Aulnay. Production has been close to zero since last month's CGT strike call.

Peugeot's broader restructuring may also face delays after the CGT won a court order forcing Peugeot to extend worker consultations to its Faurecia subsidiary.

The car maker nonetheless expects that process to conclude in time to avoid any delays to the plan, Mr. Martin said on Friday.

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Staff transfers remain temporary and can be reversed when Aulnay production returns to normal, the manufacturing boss said, adding that Peugeot currently plans to maintain both factory shifts at the doomed plant.

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