French carmaker Peugeot last night announced 850 job losses at its main UK plant in Ryton, near Coventry, deepening fears over the facility's long-term future.
The weekend shift will be cut as Peugeot attempts to adjust to falling sales of its popular 206 hatchback, made at Ryton. Until recently the 206 vied with Volkswagen's Golf as the EU's best-selling car but increasing competition in the small car sector has forced a slowdown. Sales of the 206 fell 5.2% in February.
At the peak of its popularity four shifts worked on production of the 206 at Ryton, but that has already been cut to three and the Friday to Sunday shift will end in the summer.
"Despite the Peugeot 206 continuing to be one of the best-selling cars in Europe, the small car segment has seen a considerable broadening of the product offering. This has impacted on the sales volumes of the 206," the company said. "As a result Peugeot has to review its manufacturing strategy for the car and to adjust its output in line with market demand."
The factory's other shifts will continue, the company said.
The Transport and General Workers' Union said it is planning to meet Peugeot executives this week and expects all the jobs to be shed through voluntary redundancy. It will also seek assurances about plans to update the 206 which the union believes are essential to safeguard the car's sales and therefore jobs.
"The 206 has been incredibly successful and led the market," a T&G spokeswoman said last night. "But the market is now more challenging and we need action from the company that would demonstrate its commitment to innovation and a new product. We also want assurances about the long-term future of the plant." Ryton currently employs 2,800 workers.
The union is also demanding the direct involvement of the trade and industry secretary, Patricia Hewitt, in discussions.
The announcement was made as the weekend shift drew to a close last night, but is unlikely to have come as a complete surprise to union leaders. Peugeot's senior management has made clear it is looking for cost savings by moving investment out of western Europe.
Peugeot Citroën produced 3.4 million cars last year and recorded profits of €1.1bn (£763m) on sales of €45.8bn.
The redundancies are a double blow for Coventry after Jaguar said it would end production at its Browns Lane site with the loss of 1,100 jobs.
The move by Ford, the owner of Jaguar, led to 400 voluntary redundancies and 425 jobs moved to the Castle Bromwich factory in Birmingham.
