Leaks of a confidential meeting between managers and staff, said to have warned that redundancies were being planned, were described by the company as wildly inaccurate. But union leaders said the Ryton plant had been caught in a power struggle between British management and bosses in Paris demanding better performance.
"Managers may be regretting the threats they made, but there is no question they made them,'' said Mike Robinson, regional officer at the Manufacturing, Science and Finance Union.
Next week workers vote on industrial action after rejecting a two-year pay offer worth 7 per cent, and the threats should be seen in this light, he said.
Late last year Geoffrey Whalen, managing director of Peugeot Talbot, stepped down to pursue other interests. The company said there had been no disagreements over future strategy and underlined the continuing investment being made at the factory.
Productivity at Peugeot's French and Spanish plants are better than in Britain, but they are more automated and make comparisons difficult.
Last year, Jacques Calvet, chairman of the group, warned that despite improving fortunes the company still faced a weak market and costs had to be cut. The sudden tail-off in domestic demand surprised manufacturers, who had been hoping that British saleswould underpin sales until the sluggish Continental market picked up.
Productivity improvements at Ryton were about 12 per cent in 1992 and 1994, and about 6 per cent in 1993. The company is thought to be looking for improvements this year of between 12 and 15 per cent.
The spokesman said: "The Peugeot group remains totally committed to continuing its investment in the Ryton manufacturing plant. There are no plans for any enforced redundancies at Ryton, simply to find the most sensible ways of improving our performance and securing our future.''
Peugeot had invested £150m in the plant and was spending £30m on a saloon version of the Peugeot 306 to begin production in March. Investment to produce the new model included a £1.2m grant from the Department of Trade and Industry.Reuse content