July 25, 2012 / 5:37 AM / 5 years ago

Peugeot targets 1.5 bln eur savings from cuts

PARIS, July 25 (Reuters) - PSA Peugeot Citroen detailed first-half losses on Wednesday and announced 1.5 billion euros in further savings as it presses ahead with politically fraught restructuring plans.

Europe’s second-largest car maker posted a 662 million-euro ($800 million) first-half auto-division loss that dragged its bottom line into the red, as it had warned earlier this month when announcing 8,000 French job cuts and a plant closure.

“The depth and persistence of the crisis impacting our business in Europe requires the launch of the reorganisation,” Chief Executive Philippe Varin said in a statement. “We have a clear understanding of how hard this project is for a large number of our employees.”

Presenting the results as executives sought to push through a 10 percent French workforce reduction in a fresh round of union talks, Peugeot said its manufacturing operations burned through 954 million euros of cash in the first six months as sales fell 5.1 percent to 29.55 billion.

The net loss was 819 million euros, compared with a year-earlier profit of 806 million. Asset sales reduced net debt to 2.4 billion euros from 3.4 billion at the end of December.

The job cuts and closure of the Aulnay factory near Paris will generate 600 million euros in savings for 2015, Peugeot said. The company also aims to cut 550 million euros from investment and generate a further 350 million through cooperation with alliance partner General Motors. ($1 = 0.8275 euros) (Editing by James Regan)

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