Peugeot Citroen boss to meet French govt. following major job slash decision

PanARMENIAN.Net - French Prime Minister Jean-Marc Ayrault will meet PSA Peugeot Citroen chief executive Philippe Varin later amid growing tensions between the two sides, BBC News said.

Monday's meeting comes ahead of a government aid package for the car sector to be unveiled later this week.

The meeting follows a decision by Europe's second-largest carmaker to cut 8,000 jobs and close an assembly plant.

President Hollande's government has criticised the move, sparking a tough response from Peugeot's board.

Also on Monday, Peugeot announced a deal with Toyota under which it will start building commercial vans for the Japanese firm next year at its plant in Sevelnord in northern France.

However, the deal rests on unions at Sevelnord agreeing to changes in working conditions, including a pay freeze and reduced leave, as well as hundreds of possible job cuts.

Without these, the factory is threatened with closure along with the Aulnay plant near Paris, which Peugeot said earlier this month that it intended to shut.

Mr Hollande has denounced Peugeot's restructuring as "unacceptable."

Mr Peugeot had told Le Figaro: "We are ready to accept criticism, but there are limits... The attacks the company is currently facing have an immediate effect on (investor) perception. This is a dangerous situation."

He continued: "We are well aware of the seriousness of the plan to cut 8,000 jobs. These measures are painful. I understand they can cause shock within the company, the government and the whole of the country."

Peugeot's intention to cut jobs and close a factory has caused dismay in Paris because the new socialist government came to power promising to reverse industrial decline.

The job cuts and closure of the Aulnay plant in 2014 is part of an effort to stem operating losses now running at 200m euros ($242m; £156m) at Peugeot's manufacturing division.