By David Pearson
PARIS--One of the main labor unions at French automaker PSA
Peugeot Citroen (UG.FR) Monday said its members have signed on to a
new labor agreement hammered out after months of negotiations.
The Force Ouvriere union said 90% of its members have accepted
the terms of the accord in which management is offering work
guarantees in exchange for more flexibility in working hours, days
off and a temporary pay freeze.
Three other unions--the non-affiliated SIA, the CFTC and
CFE-CGC--are expected to say later this week that are also
accepting the terms of the agreement. However, the CGT union has
said it won't sign on to the agreement, and the CFDT hasn't made
its position clear.
Management, which expects to derive annual cost savings of 100
million euros ($136.9 million) from greater labor flexibility, has
pledged to put one new model into each of its French assembly
plants, and will maintain production at a level of one million
vehicles a year through 2016, compared to 930,000 at present.
Industry analysts say the labor agreement should serve to
reassure Chinese auto maker Dongfeng Motor Co Ltd (0489.HK), which
is considering a deeper partnership with Peugeot that could involve
it taking a stake of more than 20% at the automaker.
Peugeot's board will discuss an eventual capital increase at a
meeting on Tuesday.
Write to David Pearson at david.pearson@wsj.com
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