French car maker PSA Peugeot-Citroen is planning to invest EUR1.5bn to upgrade its production plants in France through 2016, if the labor unions agreed to a wage freeze and reduced overtime pay.
This move of the company is a part of its plans to increase the production by 7.5% to 1 million vehicles.
The company plans to produce at least one new model in each of its five French assembly plants in the next three years. It is also planning to produce the next version of compact C3 Picasso at GM's European unit Opel's plant in Spain, reported france24.com.
Peugeot had posted a first-half operating loss of EUR510m in its automotive division, following which, it initiated talks with unions in May after agreeing on a cost-reduction plan that includes the elimination of 11,200 jobs by 2015 and the shut down of a factory on the outskirts of Paris.
As part of the negotiations, the company has agreed to maintain 75% of research and development (R&D) in the country through 2016 if a deal is reached. It has also agreed that it will not close any additional French plants in the next three years. Currently, the talks between PSA CEO Philippe Varin and the labor leaders are ongoing.
The carmaker employed 76,136 people, a 65% of its total workforce, in its automotive division in France in 2012. The auto firm plans to increase its vehicles sales to more than 50% outside Europe by 2015. Recently, it also added production in China, Russia and Latin America.
