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Peugeot-Citroen to slash 8,000 jobs

Struggling French carmaker PSA Peugeot-Citroen has announced 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 fight back and are planning protests.

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

The company, which warns it faces a first-half loss of 700 million euro (£553 million) this year, is trying to save one billion euro (£790 million) 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% 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 car workers' unions.

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

CEO Philippe Varin told reporters that the company is losing about 100 million euro (£79 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 will allow it to return to long-term profitability.

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