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Immediately following the Left's victory in France's May/June parliamentary elections, Peugeot's management announced a new mass redundancy programme, cutting 2,816 jobs, to the company-wide works council.
French car manufacturers have experienced a slump in sales (down 23% in France in May 1997) and in their share of the home market, which fell from 56.3% in 1996 to 54.8% in 1997, and they are facing a price war in a context of surplus production capacity. The trade unions do not refute these facts, but opinions differ widely concerning solutions. Car manufacturers advocate measures such as reductions in costs to improve productivity and to regain competitiveness in the short term. Hence the staff reduction policies and job-cutting programmes adopted year after year by the two major French car makers, Renault and PSA. Peugeot's new mass redundancy programme for 1997-8 includes 1,971 early retirements within the framework of the National Employment Fund (Fonds National pour l'Emploi) programme, which must be approved by the Government and financed from public money. It also includes 510 measures of worker redeployment and 25 contract modifications from full-time to part-time work.
The unions are opposed to this new programme, which was negotiated with the former right-wing Government led by Alain Juppé, and which makes no provision for compensatory creation of jobs for young people. The CGT union confederation is demanding joint negotiations on a sector-wide employment plan for the automotive industry between the Government, unions and manufacturers. Three proposals have been put forward: the lowering of the retirement age, a reduction in working time and pay increases.
The new Peugeot mass redundancy programme was due to be debated again on the 7 July by the company-wide works council, which would then give its official opinion.