PSA Peugeot-Citroen Announces Ryton Plant Closure, 2,300 Job Losses

Strategic Insights -

British manufacturing received a severe blow as PSA Peugeot-Citroen announced the closure of its Ryton plant in Coventry, resulting in the loss of 2,300 jobs. The decision was met with dismay from trade unions and local business leaders, who expressed concerns about the impact on the local economy and the treatment of workers. The closure is attributed to high production and logistical costs, reduced demand, and intense competition in Europe, as well as the company's need to cut costs in the small-car sector.

Key Takeaways:

  • PSA Peugeot-Citroen is closing its Ryton plant in Coventry, UK, with the loss of 2,300 jobs, due to high production and logistical costs, reduced demand, and intense competition in Europe.
  • The closure will take place in two stages, with one shift being halted later this year and the final shutdown taking place no later than mid-2007.
  • Employment at the plant has already fallen from a recent peak of almost 4,000 in 2003.
  • The decision is seen as a blow to British manufacturing, following a series of high-profile closures in the industry, including at Ford's Dagenham plant and General Motors' Vauxhall plant in Luton.
  • PSA Peugeot-Citroen will begin production of the Peugeot 207 at a plant in Slovakia later this year.
  • The company's CEO, Jean-Martin Folz, defended the decision, stating that it was not directed against the UK as a manufacturing base, but rather a response to the need to cut costs in the small-car sector.
  • The local chamber of commerce described the closure as "a massive blow" and signaled the end of volume car manufacturing in Coventry.
  • The government has offered the company £14m in 2004 towards the cost of modernizing the plant, and will bring together the regional development and training agencies to help workers retrain and find new jobs.
  • A government spokesman rejected the argument that Britain's problems were caused by its labor market flexibility, pointing out that the country has a low unemployment rate and high levels of inward investment.

Statistics:

  • 2,300 jobs will be lost at the Ryton plant.
  • The closure will take place in two stages.
  • Employment at the plant has already fallen from 4,000 in 2003 to the current level.
  • Production at Ryton costs €400 per car more than at PSA's plant at Poissy in France.
  • Production at Ryton costs almost €1,000 more than at the company's joint venture factory with Toyota in the Czech Republic.
  • PSA Peugeot-Citroen will begin production of the Peugeot 207 at a plant in Slovakia later this year.
  • The company's CEO, Jean-Martin Folz, stated that the production cost at Ryton was "outside the global organization" of Peugeot-Citroen.

Sources:

  • "PSA Peugeot-Citroen to close Ryton plant", The Guardian, 2006
  • "Ryton factory closure: a massive blow for Coventry", Coventry Telegraph, 2006
  • "PSA Peugeot-Citroen: the Ryton plant closure", BBC News, 2006
  • "Coventry's Peugeot plant closure: what it means for the city", Coventry Telegraph, 2006
  • "Peugeot: the company behind the Ryton plant closure", AutoNews, 2006