The title of an Al-Jazeera article released on July 10, 2012 is “French automaker Peugeot to shed 8,000 jobs” (Web-site/URL: http://www.aljazeera.com/news/europe/2012/07/20127121546390440.html).
“Some 3000 NON-assembly jobs will also be scrapped across the country”. WOW. That’s A LOT OF “shedding”.
“Combined with France’s share of 6,000 European job cuts announced last year (2011), the latest measures will reduce Peugeot’s 100,000-strong domestic workforce by close to 10 per cent, excluding subcontractors and service providers”. If we “reduce” 100000 by 10%, 100000 becomes 10000, a HUGE decrease.
“After initially rising, shares in family-controlled Peugeot were DOWN 1.3 per cent earlier on Thursday (July 12, 2012)”, a SIGNIFICANT drop/decline.
“The stock has PLUNGED 32 per cent since January 1 (2012), wiping 1.2 BILLION euros off the company’s market value”. That’s A LOT OF MONEY.
“Peugeot’s global sales FELL 13 per cent to 1.62 million light vehicles in the first six months – contrasting with a more modest 3.3 per cent decline reported by Renault and a 10 per cent gain for the Volkswagen brand”. VOLKWAGEN is clearly DOING WELL while Renault isn’t doing as badly as Peugeot.
“Seeking to disarm the critics, (Chief Executive Philippe) Varin disclosed that a 700 million-euro ($857.5m) loss at the core manufacturing division had dragged the group into the red. Operating cash flow is not expected to turn positive before 2015, he also said”. That’s almost 3 years away.
“Chief Executive Philippe Varin told reporters” “I know how serious these measures are for the people concerned and for our entire company. But a company can’t preserve jobs when it is burning 200 million euros ($245m) a month in cash”. This sounds like the GOP in the United States talking about how we must CUT SPENDING and control the DEBT and the DEFICIT. “Prevaricating would have put the group IN GREAT DANGER“.
According to CGT union leader Jean-Pierre Mercier, “Varin HAS DECLARED WAR ON US and WE’LL GIVE HIM WAR“. Once again, the ANGER in these tough economic times is unprecedented.
Finally, according to Erich Hauser, “a London-based auto analyst with Credit Suisse”, “People WEREN’T EXPECTING them to consume cash at such an alarming rate for such a long time“, but this is REALITY. “This is a company THAT HAS RUN OUT OF OPTIONS” and again, that’s NOT good. “Peugeot has LOST THE PLOT in European small cars, which were its TRADITIONAL mainstay“. This reinforces that we need to focus on the correct/an appropriate TARGET MARKET and we must also BALANCE “tradition” with CREATIVITY/INNOVATION.
So, with Peugeot cutting 8000 jobs, it is evident that WE STILL FACE SIGNIFICANT HEADWINDS in terms of the economic recovery and EUROPE is still a MAJOR troublespot/headache.