PARIS – Struggling French carmaker PSA Peugeot-Citroen, facing diving sales in crisis-hit southern Europe, announced a drastic cost-cutting plan Thursday to slash 8,000 jobs in France and close a major factory north of Paris.
Workers at the plant in Aulnay-sous-Bois walked off the job and staged a protest in front of the site, one of France's biggest car factories and a bastion of automaking and autoworkers' unions.
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 fierce car market. It is suffering particularly amid a slump in sales in the recession-hit south of Europe, and saw sales plunge 20 percent in Europe in the first quarter.
The restructuring plan also includes cuts of 1,400 jobs at the company's Rennes factory and 3,600 jobs in other French sites. The company employs about 100,000 people in France and 209,000 people worldwide. The announcement came after the company announced plans last year to cut 6,000 jobs.
Chairman 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.
About 250 striking workers gathered in front of the Aulnay-sous-Bois plant after the announcement.
"It's a feeling of disgust because PSA has played with us for a year, over a year now, saying that it's not certain, we're not going to close," said Khenniche of the SUD union, 42, who has worked at PSA Peugeot Citroen for 17 years.
Worker Abdallah Baih said, "I woke up this morning, started having breakfast turned on the TV and saw on the screen ...'The Aulnay site is going to close.' Anger. We really feel anger and it's unfair."
In the first quarter, Peugeot Citroen's core automotive division saw revenue from new vehicle sales shrink nearly 17 percent to €6.98 billion. The company's worldwide sales totaled 790,100 vehicles in the first quarter. Peugeot Citroen's car parts, financing and logistics divisions managed to partly offset weakness in the car making business.
Peugeot-Citroen shares were up 0.45 percent to €7.17 in early afternoon trading.
Under the alliance with GM, the American company became the French automaker's second-largest shareholder with a 7-percent stake, behind the Peugeot family, whose stake dropped from 31 percent to around 25 percent.
Peugeot says the deal will allow it to address tightening emissions targets in Europe and strengthen its position in emerging markets in a way not economically feasible on its own.
Nicolas Garriga at Aulnay-sous-Bois and Masha Macpherson in Paris contributed to this report.