By Peggy Corlin - 18th April 2006
The decision by French car maker Peugeot to move production from the UK to eastern Europe has prompted criticism of divergent EU labour laws.
Peugeot’s employees reacted with dismay to Tuesday’s announcement of more than 2,300 job losses at one of the company’s biggest UK plants.
The company blamed the decision to close the plant on losses caused by high production costs.
Peugeot last year unveiled plans to invest more in eastern Europe where production costs are lower.
The French firm has been accused by British trade unions of taking advantage of the UK’s flexible labour laws.
“It is inconceivable that workers in France would be laid off on this scale,” said Derek Simpson, general secretary of the site’s main union, Amicus.
“Weak UK labour laws are allowing British workers to be sacrificed at the expense of a flexible labour market.”
The protests across France at the relaxation of the labour laws implied by the proposed ‘first job contract’ - which would have made it easier for employers to fire young workers - reflects the continued level of protection from which French employees benefit.
But such social protection comes at a price - a rigid labour market and some of the highest levels of unemployment in the EU.
Ironically, Britain’s liberalised labour market is often held up as a good example to protectionist-minded countries such as France.
But neither country is able to compete with other EU members in central and eastern Europe in terms of cost, raising the possibility of a further ‘drain’ of skilled labour towards the new member states.
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