France's Hollande: Peugeot must renegotiate layoff plan

Sat Jul 14, 2012 11:29am EDT
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By Daniel Flynn and John Irish

PARIS (Reuters) - French President Francois Hollande said on Saturday Peugeot must renegotiate a plan to lay off 8,000 workers to lessen its social impact and accused the carmaker of lying over its intentions and making serious strategic errors.

In a television interview, Hollande said a government rescue plan for the ailing car sector due to be announced on July 25 would include public incentives to encourage consumers to purchase French-made, environmentally friendly cars.

He ruled out, however, a return to the scrappage subsidies introduced in the 2009 financial crisis by former conservative President Nicolas Sarkozy, which he said had cost the taxpayer dearly and had often been spent on foreign-made vehicles.

However, he admitted he could not halt Peugeot's plant to stop production at the Aulnay assembly plant near Paris in 2014.

Hollande, who won power in May with a promise to tackle high unemployment and halt France's steady industrial decline, acknowledged Peugeot (PEUP.PA: Quote) had economic reasons for making the cuts.

The company said last week its manufacturing arm is losing 200 million euros ($244.88 million) a month.

"However, the plan in its current condition is not acceptable. It must be renegotiated," Hollande said, adding he wanted to make sure voluntary redundancy packages or new jobs were found for all workers. "We want to open discussions so that there are no straight firings at Peugeot."

Peugeot has so far said it will find jobs within the group for 1,500 of the workers concerned, with a further 3,600 workers offered voluntary redundancy until 2013.   Continued...

France's President Francois Hollande (C) and his companion Valerie Trierweiler (L) shake hands with visitors in the gardens of the Elysee Palace in Paris July 14, 2012. REUTERS/Kenzo Tribouillard/Pool