12 Feb 2009

Peugeot Citroen announces huge loss, job cuts

3:22 pm on 12 February 2009

French auto giant PSA Peugeot Citroen has announced a net loss of 343 million euros for 2008 and said it would reduce its workforce by about 11,000.

The firm had made a profit of 885 million euros in 2007.

Peugeot plans to cut costs by cutting about 11,000 jobs over the year in its European factories. The company employed 207,850 people worldwide in 2007.

PSA Peugeot Citroen will cut its output by 20% over the year,.

"The group expects western European automotive markets to experience a further decline of around 20 per cent in 2009 followed by stability in 2010," group chairman Christian Streiff said in a statement.

"The first half of 2009 is expected to be particularly difficult. 2009 is expected to be loss-making for the group," he added.

On Monday, France's President Nicolas Sarkozy agreed to lend Peugeot and its French rival Renault three billion euros each in exchange for a promise that they would not lay off French workers or close French plants.

Peugeot notably has large sites in Slovakia and the Czech Republic, and both Prague and the European Commission have warned Paris not to protect its own industry at the expense of that of its EU partners.