French carmaker PSA Peugeot Citroen is planning to shut down its Aulnay automobile manufacturing facility and reduce 6.7% of jobs in the country by 2014 to pare its operational losses.
As part of the plan, the automaker, will stop operation at Aulnay plant which employs 3,000 people and refocus Parisian area production at the Poissy plant.
The company is taking the meausres after demand contraction in Europe which reported 8% drop in 2012 and 23% drop between 2007 and 2012.
PSA Peugeot Citroen said there is overcapacity in its European facilities with its plants running at 76% utilisation in first-half 2012.
In a bid to reduce operational cost, the French automaker will cut 14,000 jobs and that nearly 8,000 additional positions in the current reorganisation were being eliminated, on the top of 6,000 posts announced in 2011.
PSA Peugeot Citroen Managing Board chairman Philippe Varin said the depth and persistence of the crisis impacting the company's business in Europe have now made this reorganisation project indispensable in order to align its production capacity with foreseeable market trends.
"The project presented today should enable the Automotive Division, the heart of our Company, to get back on track and restore its ability to execute its strategy," Varin said.
"In this way, we will secure the Group's future and our car production base in France."
PSA is expecting an operational loss of nearly EUR700m during the H1 2012, due to a slump in sales in the recession-hit Southern Europe, and saw a 20% push in Europe during Q1 2012.
The automaker's restructuring plan also comprises 1,400 job cuts at its Rennes facility and around 3,600 jobs in other French plants.
