October 25, 2012 / 1:55 PM / in 5 years

Peugeot to talk to unions over job cuts

PARIS, Oct 25 (Reuters) - Struggling French carmaker PSA Peugeot Citroen has agreed to talk to unions over the details of a plan to cut 8,000 jobs in France, aiming for a deal by the end of the year.

Europe’s second-biggest automaker was thrown a debt lifeline this week from its banks and the French government i n an attempt to help it resist a shrinking car market, costly domestic production and high exposure to crisis-hit southern Europe.

The government wants Peugeot to cut fewer jobs than the carmaker would like in exchange for the support.

Shares of Peugeot were down 4.3 percent at 5.32 euros. The stock is trading at historic lows as analysts doubt the government rescue will help the company swiftly turn the corner.

Peugeot said on Thursday it would negotiate an agreement with unions over relocating workers and other conditions, to be finalised by the end of the year.

The 8,000 job cuts include 3,000 at a site in the Paris suburb of Aulnay-sous-Bois and 1,400 in the northwestern city of Rennes.

French company ID Logistics said it would take over part of the Aulnay site and create 600 jobs that could be offered to Peugeot workers as part of restructuring talks with unions. ($1 = 0.7711 euro) (Reporting by Lionel Laurent; Editing by Erica Billingham)

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