PSA Could Seek Investors For Part Of Paris Plant

PARIS (Reuters) - PSA Peugeot Citroen (PEUP.PA) is ready to hand over part of its Aulnay car plant to industrial or real-estate investors amid declining production at the factory north of Paris, the company said on Friday.

The automaker is seeking tenants for a further 17,000 square metres (183,000 square feet) of the facility after renting out 23,000 square metres freed up by shrinking car production, a PSA spokesman said, confirming a French government statement.

Local, union and government officials won renewed assurances from the Paris-based company on Friday that Aulnay would continue assembling Citroen C3 subcompacts until 2014, according to the industry ministry statement.

French political sensitivities over factory closures and industrial job cuts are heightened ahead of the two-round presidential election, which ends on May 6.

A Peugeot internal document leaked last June outlined plans to shutter Aulnay, which employs 3,500 people, but stipulated that no announcement could be made before the elections.

Peugeot Chief Executive Philippe Varin has denied that any decision had been taken while acknowledging that the plant’s future is in doubt beyond 2014.

Both Peugeot and its new alliance partner, General Motors (GM.N), have said that capacity cuts are needed to restore their European manufacturing operations to profitability.

The government is ready to grant aid to new investors in the Aulnay site, the ministry added on Friday.

Five out of seven trade unions walked out of stormy talks with state and company representatives on Friday, the CGT’s Jean-Pierre Mercier said, with no concrete progress made.

“The unions demanded that PSA commit itself in writing ... to maintaining all the jobs until at least the end of 2016, when C3 production officially ends, and to assigning a new vehicle to replace the C3,” the CGT representative said.

“But management doesn’t want to commit itself to anything at all.”

The date of the next talks on Aulnay has been fixed for late June, after the election, prompting the CGT to call for a protest outside President Nicolas Sarkozy’s Paris headquarters next Thursday.

Editing by Ron Popeski

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