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Peugeot court ruling may delay job cuts

Raindrops are seen on a Peugeot car parked in Paris, January 9, 2013. REUTERS/Christian Hartmann
Raindrops are seen on a Peugeot car parked in Paris, January 9, 2013. REUTERS/Christian Hartmann

PARIS (Reuters) - PSA Peugeot Citroen will continue negotiating 8,000 job cuts with unions despite a court ruling that may delay their implementation, the struggling French carmaker said on Tuesday.

"The negotiations are not suspended and will continue to make progress," a company spokesman said.

In a court ruling on Monday, the Paris Appeal Court ordered a temporary suspension of the restructuring until the group completes worker consultations at two sites belonging to parts division Faurecia .

But the court rejected an application by the CGT union to halt the entire plan and consultations that are required by law before its implementation.

Peugeot shares were down 1.6 percent in midday trading, wiping out a gain of about 1 percent prior to the ruling being made public.

Peugeot is still in formal talks over its decision announced last July to close the Aulnay plant near Paris and cut 8,000 jobs in addition to hundreds of positions eliminated under an earlier plan.

The CGT union had challenged the plan in court by arguing that it had failed to consult workers at two Faurecia sites that would be directly affected by the Aulnay closure and other cutbacks at the parent company.

The French automaker, which is struggling to return to profit by 2015, will begin consultations at Faurecia without delay, in compliance with the ruling, the spokesman said.

Under its terms, the Faurecia talks will have to be completed before Peugeot can carry out the broader restructuring program it had hoped to finalize by February or March.

Ongoing negotiations with the main Peugeot workforce will continue as planned on February 5 and 12, the spokesman added, without giving a new time frame for completion.

(Reporting by Laurence Frost; Editing by Christian Plumb)

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