Peugeot set to slash 8,000 jobs

The struggling French car maker Peugeot Citroën yesterday launched 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 the cutbacks.

The company's management announced the job losses and closure plan during a meeting with worker representatives.

Peugeot Citroën, which warns it faces a first-half loss of €700m (£552m) this year, is trying to save €1bn as it struggles to compete in Europe's fiercely competitive car market. Sales plunged 20 per cent in Europe in the first quarter.

The restructuring plan includes the closure of Peugeot Citroën's Aulnay-sous-Bois factory, one of the biggest car plants in France.

It will be the first car plant to cease production in France for 20 years, posing a challenge to new Socialist president François Hollande's objective of reviving industrial production.

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

The chief executive Philippe Varin said the company is losing about €100m per month.