PSA plans further cuts at UK plant and expects to reduce French workforce in 2018

9 January 2018

PSA Group has announced it is to cut another 250 jobs at the UK’s Ellesmere Port plant reducing the factory’s output to just a single shift.

The move means a total of 650 jobs will be lost at the Vauxhall plant, following an announcement last year that the group was to cut 400 jobs. PSA took over Vauxhall, along with the Opel brand, in August 2017 and has been looking at cost-saving measures to return the former General Motors company to profitability.

A PSA spokesman said the carmaker told representatives of the Unite trade union at a meeting last week that it now needed to go further than the job losses already announced.

′The company explained that although the initial voluntary separation program at its Ellesmere Port plant announced in October has been successful, it needs to initiate a further voluntary program for eligible employees of a further 250,’ PSA said in a statement

′The teams are conscious of the need to accelerate the recovery of plant productivity to meet the challenges ahead,’ the automaker said.

The Ellesmere Port plant, which produces the Astra model, will move to a single production shift from April. The news comes following months of examinations into Opel’s productivity, with PSA Group CEO Carlos Tavares constantly comparing the manufacturer’s efficiency to existing group facilities.

Vauxhall said the initial voluntary redundancy program announced in October had been successful but that it needs to initiate a further voluntary program for 250 more employees. ′The teams are conscious of the need to accelerate the recovery of plant productivity to meet the challenges ahead,’ its statement said.

The move will not dispel rumours that PSA may look to move Astra production to mainland Europe, especially as it could save costs following the country’s plans to leave the European Union. A decision is expected this year. However capacity is available at other PSA plants which handle similar size models for Peugeot and Citroen.

The French manufacturer group has also reached an agreement with unions to cut working hours and offer early retirement packages to its employees. Working time will be reduced in the engineering and administration departments for at least six months with the move starting at the beginning of January. Starting in April, the work week for the company will also be shortened to 35 hours.

Meanwhile, PSA is also planning to eliminate 1,300 French jobs in 2018 using a new form of voluntary cuts introduced by President Emmanuel Macron.

The departures, roughly equivalent to buyouts, are part of 2,200 voluntary job cuts planned this year, according to the CFTC union. The figure excludes thousands of new hires and job eliminations by attrition.

PSA is among the first handful of companies that have announced plans to use the new flexible labour measures introduced by decree within months of Macron’s election last May.

Photograph courtesy of Opel