Peugeot eyeing 10,000 job cuts

French carmaker PSA Peugeot Citroen (PEUP.PA: Quote, Profile, Research) refused to confirm a report on Saturday that it was considering plans to cut up to 10,000 jobs at its French and European operations and among sub-contractors.

Without identifying its sources, financial monthly Capital reported on its Internet site that Chief Executive Christian Streiff had delayed announcing the plan until after the last round of the French presidential election on May 6.

It reported that he had said privately the restructuring plan "was about the survival of Peugeot" and said he had hoped to unveil the announcement before the election campaign.

"This is a report that I cannot confirm, there is no restructuring plan foreseen," said Peugeot spokesman Hugues Dufour on Saturday.

The report comes just hours before polls open in the first round of the election on Sunday after a campaign in which worries over job cuts have been among the main issues.

Capital said that Streiff had agreed to hold off announcing the restructuring under pressure from Prime Minister Dominique de Villepin but that he had come to the conclusion that "implementation of the plan could not wait for the summer."  

An official from the prime minister's office "categorically" denied the report. "The government does not intervene in the operations of a private company in which it is not a shareholder," the official, who declined to be named, said.

The report quoted Streiff as saying "in private" that "the ideal would be to announce the job cuts after the second round of the presidential election."

The Socialist Party, whose candidate Segolene Royal has been running second in the opinion polls behind right-wing former interior minister Nicolas Sarkozy, demanded a response from both the company and the government.

Streiff, former head of Airbus, joined Peugeot earlier this year after his plans for drastic restructuring at the European aircraft maker were rejected by its parent EADS.

Dufour said the group had signed a preliminary agreement with five unions earlier this month for a plan that would allow it to offer voluntary redundancies to some workers.

"The agreement looks forward at the evolution of jobs at PSA and provides, in cases where the group would be obliged to cut jobs, for facilitating voluntary departures with financial assistance from the company," he said.

He said the agreement was "only a framework" and added: "Nothing is anticipated at the moment."