BUSINESS

Struggling carmaker Peugeot-Citroen slashing 8,000 jobs in France, closing iconic plant

07/12/2012 04:19 EDT | Updated 09/10/2012 05:12 EDT
PARIS - Struggling French carmaker PSA Peugeot-Citroen announced Thursday a drastic cost-cutting plan to slash 8,000 jobs in France and close a factory north of Paris, as it faces diving sales in crisis-hit southern Europe.

Union members vowed to try to fight back and plan protests later Thursday.

Company management announced the job cuts and closure plan during a meeting Thursday with its worker representatives.

The company, which warns it faces a first-half loss of €700 million ($858.2 million) this year, is trying to save €1 billion as it struggles to compete in Europe's fiercely competitive car market. It is suffering particularly amid a slump in sales in the recession-hit south of Europe. Its sales plunged 20 per cent in Europe in the first quarter.

The restructuring plan includes the closure of Peugeot-Citroen's Aulnay-sous-Bois factory, one of the biggest car plants in France and seen as a bastion of car-making and of autoworkers' unions.

The company will also cut 1,400 jobs at its Rennes factory and 3,600 jobs in other French sites.

CEO Philippe Varin, grim-faced, told reporters that the company is losing about €100 million per month. "No one will be left along the side of the road," he pledged:

The company is hoping a new alliance with General Motors Corp. will allow it to return to long-term profitability.

"It's no longer possible to continue to lose jobs like this. We have to come together to make the management back down," said CGT union member Jean-Pierre Mercier, who was present at Thursday's works council meeting.