Beleaguered French carmaker PSA Peugeot Citroen announced plans Wednesday for a €1.5 billion cost-reduction plan after posting net losses of €819 million in the first half of 2012, compared to €806 million in net profits for the same period in 2011.
AFP - Struggling French carmaker PSA Peugeot Citroen said Wednesday it had suffered a net loss of 819 million euros ($989 million) in the first half, against a net profit of 806 million euros in the first half of 2011.
The company, which has already announced 8,000 job cuts in France, said it will be implementing a 1.5-billion-euro cost reduction plan by 2015.
Peugeot, France's biggest carmaker and the second-largest in Europe, had already indicated it had suffered a loss in the first half but the figure was worse than analysts' expectations.
In a statement, Peugeot said its revenues were down 5.1 percent in the first half to 29.6 billion euros while its recurring operating income was at breakeven at four million euros, against 1.16 billion euros in the first half of 2011.
Its auto division suffered an operational net loss of 662 million euros.
The cost cutting plan, dubbed "Rebound 2015" in the statement, will include 600 million euros in savings from reorganising French production, which includes the previously announced job cuts.
Another 550 million euros will be saved by reducing capital expenditures and 350 million euros will be from cost savings expected from a tie-up with US giant General Motors announced earlier this year.
"The group is facing difficult times," Peugeot chief Philippe Varin said in the statement.
"The depth and persistence of the crisis impacting our business in Europe requires the launch of the reorganisation of our French production base and a reduction in our structural costs," he said.
"Restoring the group's competitiveness will secure its future," he said.
Date created : 2012-07-25