April 18, 2012 / 1:10 PM / 6 years ago

Peugeot, Toyota in factory-sharing talks-Sarkozy

PARIS, April 18 (Reuters) - PSA Peugeot Citroen and Toyota are in talks to share vehicle production at a factory in northern France, President Nicolas Sarkozy said in a newspaper interview.

Sarkozy, who last week summoned Peugeot Chief Executive Philippe Varin for talks on another threatened plant, told La Voix du Nord that the Sevelnord facility was likely to be saved by the new partnership.

“Sevelnord will be OK,” the French president was quoted as saying, before adding that he had discussed the plant with Varin. “My understanding is that there’s a deal in discussion with Toyota for light commercial vehicles.”

The French president did not say whether Toyota was the only potential Sevelnord partner in talks with Peugeot.

Europe’s auto industry is grappling with excess capacity and cut-throat price competition as overall demand sags under the weight of the debt crisis. All major car makers except Volkswagen lost money in the region last year.

Auto workers at Peugeot and at GM’s Opel unit are braced for a fight with management as a clearer picture emerges of the job cuts and plant closures likely to result from their cost-cutting alliance, announced in February.

The Sevelnord factory near Valenciennes employs some 2,800 workers and produces Peugeot Expert, Citroen Jumpy and Fiat Scudo delivery vans. Italy’s Fiat is withdrawing from the venture in 2017, and Peugeot’s Varin said in January he was seeking a new partner to take its place.

Toyota, which has ruled out buying a stake in Sevelnord, declined to comment on Sarkozy’s remarks or say whether there were plans for the factory to assemble vehicles under the Japanese automaker’s brand. Peugeot also had no comment.

Peugeot unions are seeking to put feared plant closures at the centre of France’s presidential election campaign, which culminates with a second round of voting on May 6.

Sarkozy, who is trailing Socialist challenger Francois Hollande in opinion polls, summoned Varin talks after workers from Peugeot’s Aulnay plant near Paris organised a protest outside his campaign headquarters.

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