October 25th, marked the last day of automobile production at PSA Peugeot Citroën’s factory at Aulnay-sous-Bois.  The last vehicle off the line was a Citroën C3 destined to the Citroën Conservatoire.  (The production of the Citroën C3 is now fully moved to Poissy.)  Now the factory is relegated to producing spare parts and that will terminate in early 2014.

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The 170 acre Aulnay-sous-Bois site was opened by Citroën in 1973, beginning production with the DS model.  Two years later it combined with Peugeot to create the current company and from 1976 onward Aulnay was a plant of PSA Peugeot Citroën jointly.  In the 40 years of production, in Aulnay a total 8,568,391 million vehicles were produced: the Citroën CX (1974 to 1989: 1,013,069 units), the Citroën AX (from 1986 to 1995: 1,067,615 units) and the Citroën Saxo (1995 to 2003: 1,662,288 units) was followed by the CITROËN C3 (2001 to 2013: 2,081,433 units).

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On July 12, 2012, PSA Peugeot Citroën announced that due to sagging sales in Europe and high labour costs, closure of the Aulnay plant was enviable.  Politicians in President François Hollande’s government, including the outspoken industry minister, Arnaud Montebourg, publicly took the company to task over the plan, but later acknowledged that it was a commercial and financial necessity for the company to cut capacity.

PSA Peugeot Citroën has five other big automotive plants in France, and Aulnay’s importance had declined amid ebbing profitability for the subcompact cars it produced. Of a total 2.9 million vehicles Peugeot made worldwide last year, only 120,000 came from Aulnay.

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PSA Peugeot Citroën introduced a social plan for Aulnay workers on May 2, 2013, whereby 2,700 of the 3,000 employed staff would be subject to restructuring activity, supporting each employee in their job search with an on site team of 75 HR specialists.  Philippe Varin, PSA Peugeot Citroën’s chief executive claims that 1,100 staff have found new jobs within the company, another 1,100 went to other companies, and 500 workers have gone into retirement or benefit from external reintegration measures.

But Jean-Pierre Mercier, an official of CGT – the largest union at Peugeot – disputed Mr. Varin’s account, saying the situation among the Aulnay workers was much worse than the company was acknowledging.  Management wants to convey the idea “that everything is fine, don’t worry,” Mr. Mercier told LCI Television. But a claim by Mr. Varin that 90 percent of those who have lost their jobs at Aulnay had found new employment or are get-ting retraining, he said, is “a lie, another lie from management.”   The real figure, he said, is 40 percent, and the Aulnay workers will pursue the company in labor court over the conditions of the layoffs.   A PSA Peugeot Citroën spokeswoman declined to comment on Mr. Mercier’s assessment.

The closing of the plant has had a painful impact on the northern suburb of Aulnay-sous-Bois, which is in an area where good jobs are scarce amid France’s 11 percent unemployment rate.

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Recognition of the gravity of PSA Peugeot Citroën’s challenges have led to important concessions with four of the company’s six unions agreeing to accept lower overtime pay, a wage freeze and greater willingness to change jobs within the company in return for the promise of a share of future profits and job security.  Two, including the CGT, have refused.

At the same time, the company is working on various scenarios to reindustrialize the site and employ some of the skilled workforce at the Aulnay factory.  ID Logistics is the first company slated to begin operating at Aulnay in 2015, creating 590 new jobs.

PSA Peugeot Citroën, which also includes the auto parts maker Faurecia and Peugeot’s finance unit, employs more than 200,000 people worldwide, including about 90,000 in France.

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