ACTIVITY 2.1.2 LOWER DEMAND FOR PEUGEOT CARS LEADS TO JOB LOSSES Peugeot closed its Aulnay plant near Paris, which employed 3000 workers, in 2014. The company also announced 1400 job cuts at a plant in Rennes and 3600 across the rest of France. Philippe Varin, the chairman of Peugeot said: The depth and persistence of the crisis impacting our business in Europe have now made this reorganisation project indispensable in order to align our production capacity with foreseeable market trends. Mass-market European carmakers are struggling due to the eurozone crisis and too many vehicle plants. With the existing level of over-capacity in the industry it was inevitable that the number of workers needed by some of the major manufacturers would fall. In 2014, Peugeot's sales were 23% lower compared to 2007. The company's European plants are operating at just three-quarters of capacity. Making redundancies will reduce costs and help to restore Peugeot's profitability. 10 marks, 20 minutes 1. Define the term 'redundancy'. Answer: [2] 2. Explain two reasons why human resource planning is important to a firm like Peugeot. [4] Answer: I 3. Analyse two factors that might influence the number of workers employed by Peugeot. (4)