Peugeot defends plans for cuts after slumping to first-half loss

 
Ben Southwood
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PEUGEOT yesterday promised to press ahead with cost savings, as it registered a huge loss for the first half of the year.

An overall loss of €819m (£641.8m) was driven by a €662m loss in the French giant’s car making division, itself driven by sales that fell 5.1 per cent to €29.55bn.

Chief executive Philippe Varin defended plans to cut 10 per cent of the firm’s French workforce, saying the move will provide €1.5bn of cost savings by 2015.

“The depth and persistence of the crisis impacting our business in Europe requires the launch of the reorganisation,” Varin argued.

But there has been a political furore over the cuts, that President Francois Hollande has described as “unacceptable”, and Peugeot has had to face up to significant union opposition.

A deal with unions that aims to keep Sevelnord plant open, which produces small and medium vans, is currently being negotiated, but workers may find the terms – including job losses and a pay freeze – hard to stomach. Union members yesterday gathered outside Peugeot’s Paris headquarters to protest the cuts.