Peugeot's recent announcement about job cuts has caused a number of different reactions. When the French firm previously attempted to shed 6,000 jobs, company CEO Philippe Varin was called to Elysées Palace – the French White House – and then-president Nicolas Sarkozy suggested to him, in one of those ways that Varin couldn't refuse, that Peugeot reconsider, which it did. But there's a new president in the big house now, and Peugeot's position has gotten more dire, which has led the carmaker to reportedly raise its retrenchment level to 8,000-10,000.

Peugeot stock rose almost four percent on the announcement. But that only demonstrates the power of words, because actually getting rid of those 10,000 workers will be far more difficult. French workers are, of course, unhappy about the news and have been demonstrating outside company headquarters (as shown above). An outside analyst said the plan only makes the situation at Peugeot appear worse, and wonders how the firm can get rid of twice the number of jobs it couldn't shed when there was a more conservative government in power.

That conservative government gave both Peugeot-Citroën and Renault billions of euros in loans to weather the financial crisis, the bargain being that neither automaker would close French factories. The tribulations of both firms continue, and they haven't 'paid back' their debts; meanwhile, the government voted in with new president François Gérard Georges Nicolas Hollande is staunchly socialist, and there's almost no way the new president will quietly let 10,000 workers be added to the unemployment rolls after he campaigned on a platform of saving jobs.

As with the continually fluctuating headlines and fortunes of Greece, Spain and Italy, everyone knows the problems but no one seems to know where things will actually end up. The truths of economic possibilities, prudent fiscal policy, the profit motive and political maneuvering are swirling into an end-game that no one wants to face with their eyes open. During the holding game, Peugeot's factory overcapacity is closing in on 25 percent, its sales are falling and its debts are climbing. The tieup with General Motors will help a bit, but there are pressing near-term issue, and as with the situation in Europe overall, this is a long way from being over.


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  • 36 Comments
      Avinash Machado
      • 2 Years Ago
      The problem with Socialism is that you eventually run out of other people's money - Margaret Thatcher.
      Titanium Welders
      • 2 Years Ago
      I'm still trying to find Morpheus so I can take that red pill and escape this reality the world is in now. 10,000 people lose their jobs, they're familys are going to suffer as well, figure most of those have a spouse and 2.5 kids, you're looking at over 50,000 people directly affected by those jobs being cut. But thats ok as long as some jackasses who have nothing to do with the design, engineering, production or sale of the cars (stock holders) make money from the deal. Look at that scenario in great detail on how suits make money off of other peoples suffering and you'll see just how screwed to hell this world is. Check please waitress..... I'm done with this world.
        GasMan
        • 2 Years Ago
        @Titanium Welders
        The job belongs to the corporation, not the worker. If they want to withdraw it at any time, they can. If you don't want to be in that situation, don't work for the man.
        Duck
        • 2 Years Ago
        @Titanium Welders
        Sounds like you're on too many pills already.
      ducman69
      • 2 Years Ago
      Ugh... socialists. They shouldn't have been given a dime in the first place, been allowed to shed the jobs it needed, and adjusted itself to the current marketplace in a sustainable and profitable size/volume/cost.
        lasertekk
        • 2 Years Ago
        @ducman69
        Sorry, but the current economic model the planet is following as a whole is not sustainable. Throw in the taint of human-contrived ideology and it gets worse.
      Klinkster
      • 2 Years Ago
      The solution: Nationalise Peugeot & let it become a government make-work project. Then ask Germany for money when France bankruptcy looms... EU = screwed up and ready to implode!
        A P
        • 2 Years Ago
        @Klinkster
        You got that %100 right. Decades of socialistic policies are biting them in the ass like crazy. When I see boobs on here tell how "superior" Europe is I roll over laughing. The future is the Pacific Rim and the US. Europe is dying a slow death...
          A P
          • 2 Years Ago
          @A P
          Oil, If you want 60% tax rates and far less freedom to start a business or spend your own money they way you want it then socialistic states are for you. They scare their people into thinking that if the state does not take care of them then they are helpless. Its rather criminal to give that much power to governments. And if the US is in such terrible shape and Europe so good why to people beat down our doors to get here? Oh thats right, there is freedom and oppertunity here. DUH Europe and its problems have sown death and misery across this world for centuries now......they need to be contained.
          Essende
          • 2 Years Ago
          @A P
          @AP, if you would dig deeper into numbers/statistics you would notice that what Greece went through, USA is in a lot worse shape as debt per capita including future social security commitments than EU. Of course US media wants to turn everything right now on EU but USA is in an even bigger crap hole than Greece, just give it some time, and judging by current government, USA is not doing anything to stop whats essentially coming hard at us. And oh BTW, I personally know 3 recent college graduates here from USA that landed in Germany, UK, and Belgium as they simply received more attractive job offers there....
          A P
          • 2 Years Ago
          @A P
          Slid far behind? Facts are really funny sometimes. We still have the 1# economy in the world and the west coast of the US is indeed in the Pacific Rim in case you have not noticed. In what way are they "advanced"?
          • 2 Years Ago
          @A P
          [blocked]
          • 2 Years Ago
          @A P
          [blocked]
        Essende
        • 2 Years Ago
        @Klinkster
        There is absolutely nothing fun about losing a job. Its also screwed up how stock market works, 10,000 people will lose their jobs but its alright, the shares of the company will go up so that the select few people will get richer because of a misfortune of a lot of people. In all honesty, I really do not believe that any market whether its Asia/USA is "the future", right now it is a rat race to the bottom, plus the earth is over populated especially countries such as China/India, what you see there is unsustainable, they will never be able to provide most of their citizens with water/food, I believe there will be a lot of social unrest in the upcoming years there as classes will begin to clash with each other. Right now the whole planet is not going in the right direction and I just don't see anything positive in the worldwide economy in the next 20 years. There will be a bunch of unemployed people everywhere. Again, overpopulation and another issue is technology simply replacing human labor.
        bluekurgan
        • 2 Years Ago
        @Klinkster
        Klinkster, you do realize Us debt is much, much, worse then the EU one? And the same goes about the Japanese. Stop believing Murdoch's liars.
          lasertekk
          • 2 Years Ago
          @bluekurgan
          and just remember, it was US financial sector that triggered the world event. Yet no one has gone to jail yet.
        Myself
        • 2 Years Ago
        @Klinkster
        I smell a UKIP voter...
      Jon Acton
      • 2 Years Ago
      There are alternatives to laying off 10,000 workers. Its called letting the suits in charge take a pay cut. Since these people are at the helm they need to do what is ethically right; if their ill decision making leads to misfortune they need to pay for it not the lower people. I know its a crazy thought in this word taking responsibility for ones actions but it needs to be at the core of business again.
        GasMan
        • 2 Years Ago
        @Jon Acton
        While I agree 100% that the suits should take a pay cut and some should get fired for doing a poor job, that does not solve the problem of paying 10,000 people for not working. No company can survive while doing that.
        montoym
        • 2 Years Ago
        @Jon Acton
        Have you ever done the math on that? How much do you want the suits to cut from their pay? Let's do some quick math here. Say you have 10 executives at the tip top that you want to cut the pay of. Say these guys make a few million/yr. Recall that in Europe most execs aren't paid as well as in, say, the US. A quick Google search shows that Peugeot's CEO Philippe Varin makes about $3.3million Euros/yr (about $4million USD at current exchange rates). So, you have $20 million or so you can squeeze there perhaps. That $20 million, divided amongst the 10,000 worker is $2,000 per worker. A nice bonus perhaps, but hardly enough to warrant what you are suggesting and surely not enough to pay for the existing wages of those individuals. Look at it another way, say those 10,000 workers make on average about $50k/yr (I have no idea if that's accurate or not, but for argument's sake). That's $500million/yr spent on their wages alone. Are you suggesting that "the suits" cough up $500 million from their wages to pay for those 10,000 workers? Do you think you could get that much from "the suits" without completely taking their pay away? Again, remember, this is France, not the US.
        Scr
        • 2 Years Ago
        @Jon Acton
        And how do you know that some of that 10,000 let go would not be some of the 'suits'? There are no alternatives to mass layoffs like this when a company is in such dire financial trouble, and your government won't let you adjust your balance sheet to reflect the current unfortunate economic reality, especially in Europe. Its a business which has to compete with other businesses across Europe, not a welfare program to only provide jobs and just happens to make cars. Not being able to able to adjust your workforce size is partially what did GM and Chrysler in, paying people to sit in rooms doing nothing for years at a time.
        Val
        • 2 Years Ago
        @Jon Acton
        France should just nationalize PSA (again), completely, like 100% state ownership, coz the state now owns some shares (which means they are also responsible for the poor results, since state and union representatives sit on the board of directors). Then the french republic can hire 10,000 new people, if not more, and solve unemployment problems in france!
      Benjamin Roethig
      • 2 Years Ago
      Its no secret that auto unions in the west are almost completely unreasonable these days, but does it sicken anyone else that job losses are seen as a good thing by financial analysts and investors these days?
        guyverfanboy
        • 2 Years Ago
        @Benjamin Roethig
        Better to lay people off than the entire company goes under. No one at the company will have a job then!
        GasMan
        • 2 Years Ago
        @Benjamin Roethig
        I don't think all layoffs are seen by the financial analysts as good. Layoffs can also be a sign of desperation if they are not expected. In this case it is considered good because the bad news about falling Peugeot sales has already been factored into the share price and it is understood that they have way too much capacity of plants and labor for their market share. Therefore, shedding costs will help them right size, get profitable, and begin to grow again. Yeah it sucks for the workers but that's the reality of being part of a big company. If the company ceases to do well, you might be doing a great job but still get the axe. If anyone thinks they have a job for life, they better pop their head out of the sand.
      GasMan
      • 2 Years Ago
      This is a very dangerous situation. If you turn 10,000 angry Frenchmen loose on the countryside do you have any idea the devastation they can wreak on the wine, cheese, and baguettes?
        Duck
        • 2 Years Ago
        @GasMan
        Just put up scarecrows dressed in German military uniforms.
      turbomonkey2k
      • 2 Years Ago
      Go Peugeot. Drain the pus.
      Drakkon
      • 2 Years Ago
      Mathematical certainty: if you lay off workers, your stock price will rise. Like the sun setting in the east.
        Duck
        • 2 Years Ago
        @Drakkon
        Hardly, our stock rose dramatically as we were on a ridiculous hiring spree... in fact, we're still not done hiring. The reason is that we won very important contracts, that creates jobs, and the shareholders recognize that growth as a good return on investment. But when you have a company that is not profitable and hasn't been for a while, a reduction in workforce and overhead to adjust to its realistic marketshare can return the company to the green again and naturally stock prices go up. Its all about company profitability, and that can exist from hiring 10,000 workers and firing 10,000 workers.
      Yang Xi Gua
      • 2 Years Ago
      GM stock would jump 50% if GM announces it would replace all assembly workers with robots.
        GasMan
        • 2 Years Ago
        @Yang Xi Gua
        Actually their stock would probably tank because everyone would be expecting Ray Lahood (now is that a perfect name or what?) to fine them for unfair labor practices.
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