PSA move to decrease the average age of their French employees.
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Thread: PSA move to decrease the average age of their French employees.

  1. #1
    1000+ Posts gerry freed's Avatar
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    Default PSA move to decrease the average age of their French employees.

    They have announced a plan to reduce their French employees by 6% in 2015, concentrating on accelerating the retirement of their older employees. It is all part of the overall strategy to get the company cost competitive again. The negotiations start with the unions.......

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    how do they figure that would make the company cost competitive?
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    1000+ Posts gerry freed's Avatar
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    They have excessive employment costs and uncompetitive productivity in France and so the plan of Tavares has a strong focus on cost reduction.
    He wants employment costs down to 12,5 % of sales in 2016, against a ratio of 15.1% in 2013. The nature of the work is changing through automation and better ergonomics. This requires new people with new skills and new qualifications. It is logically more cost effective to retrain young people for a decade or so of application of those new skills rather than a older person who will retire in five years.

    Auto manufacturers are there to provide cars that customers want, not jobs. It is all part of changing the French mentality if they are to compete globally.
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    Contented Peugeot Driver addo's Avatar
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    Surely the cynical answer is to suggest they (of age/experience) front load project costs, by flagging potential issues before the employer is bitten by them. So it looks immediately like the unrealistic proposed budget is blown.

    Remove the aged, experienced people and your cost is on the tail; rectification by way of running changes and recalls - but if it's your pet project this may be an easier way to spread the blame around.

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    1000+ Posts gerry freed's Avatar
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    You miss the point, there is no need for cynicism. This is all a part of bringing French industry to a survival point against a background of excessive social costs and rigid structures that have prevented the flexibility needed to survive.
    Experience counts for little when the job in which you are skilled is no longer needed. In addition, PSA are letting go 1500 young people and recruiting 500 with the skills that they now need.
    It has been argued that PSA is in this position of excess costs and poor productivity because the mature management failed to change things rapidly enough against a background of adverse social costs. They are not a variable open to management but a social decision made by the electorate.
    Experience has its place but in a world of accelerating change, its time span of value is shrinking. There is no point in being a wise owl on advanced suspension systems if the market now wants to buy regional flags on the car roof.
    Renault have done it much better with a younger more dynamic managment and made the right strategic call to reduce dependence on France much earlier. Now you have younger management at PSA in the shape of an ex-Renault CEO, who is working through his strategy to get back in the race.
    A core part is investment to improve build quality and hence customer satisfaction - much better than having to spend to rectify errors after the event.
    The DS3 is a fashion statement, not serious transport and it has pushed PSA way up the customer satisfaction surveys because of the focus on build quality. In this market details count.
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