PSA Peugeot Citroën to Cut 8,000 Jobs in France PARIS - The carmaker PSA Peugeot Citroën, struggling with a deep slump in sales in crisis-torn Southern Europe, said Thursday that it would cut 8,000 jobs in France and shut a plant near Paris. The news was met with an outcry of protest from French unions, increasing the pressure on President François Hollande, who is trying to stimulate an economy in near-recession at the same time as he cuts public borrowing. Mr. Hollande, who on his inauguration day in May rode in a Citroën DS5, had vowed during his campaign against then-President Nicolas Sarkozy that, if elected, he would take a tough line with companies that announced layoffs. The factory, in the Paris suburb of Aulnay-sous-Bois, would be the first major automotive plant to be shut down in France in two decades. Peugeot said it needed to close the site because of a 10 percent drop in sales in the first half of 2012, a period during which the company said it would post a financial loss. "The depth and persistence of the crisis impacting our business in Europe have now made this reorganization project indispensable in order to align our production capacity with foreseeable market trends," said Philippe Varin, the chief executive of Peugeot. The company said it was suffering more than the European auto industry overall, which is expected to show an 8 percent decline in sales during the first half, because it is heavily exposed to economies like Spain, which was ravaged by the collapse of a property bubble and by subsequent cuts in public spending. The company said its European plants had operated at only 76 percent of capacity in the first half of the year, down from 86 percent in 2011. Analysts said, however, that some of the problems were of the company's own making. Its brands, Peugeot and Citroën, have struggled to compete with the German BMW, Mercedes-Benz and Volkswagen's Audi in the luxury segment, as well as with a domestic rival, Renault, at the budget end of the market. Renault sells low-cost cars under the Dacia brand, made in Romania. Peugeot has also struggled to expand outside Europe, which accounts for about 60 percent of sales. That dependence has limited its gains from faster-growing markets like China and South America, and has proved to be especially problematic during the extended European economic crisis. "The big issue with PSA is that they are too Eurocentric," said Carlos Da Silva, an analyst at the research firm IHS Automotive in Paris. Every time the situation worsens in Europe, carmakers that are relying mostly on European operations are really at risk. Peugeot was also late to establish alliances of the kind that other carmakers have forged to reduce the cost of buying parts and developing new models. Finally, in February, it struck such a deal, with General Motors, whose main European car brand, Opel, has also been struggling. Under that agreement, GM agreed to acquire a 7 percent stake in Peugeot. Word of the threat to the Aulnay-sous-Bois plant, which employs 3,000 workers, had already leaked out to union leaders last year. Workers have been demonstrating against the cuts, and they stopped work Thursday after confirmation of the planned closure, which was set to take place in 2014. "We will react," said Bernard Thibault, leader of the militant C.G.T. union, which represents some of the workers at Aulnay-sous-Bois. The employees have already started to react. We cannot accept this announcement as a done deal, without questioning a decision that has been presented to us, as usual, as unavoidable. Mr. Thibault, speaking during a broadcast interview, acknowledged that falling sales were a problem, but he blamed so-called austerity, stemming from public spending cuts in crisis-hit European countries. "To sell cars, you need buyers," he said. Mr. Thibault alleged that news of the plant closure, which the management had declined to confirm until now, had been delayed because "the electoral context didn't lend itself to this news." The 8,000 job cuts announced Thursday come on top of 6,000 layoffs announced last year, out of a total work force of about 209,000. About half of the workers affected at Aulnay-sous-Bois will be offered jobs at other plants, the company said. Production will also be scaled back sharply at a factory in Rennes, in the Brittany region of France. Denis Ferrand, managing director of COE-Rexecode, an economic research group in Paris, said the Peugeot woes were symptomatic of a broader loss of industrial competitiveness in France, especially vis-à-vis Germany. In 1998, the French share of exports among the countries that are now in the euro zone was 17 percent; by last year this had fallen to 12.6 percent, he said. As Germany restructured the industrial sector over the past decade, introducing new measures to increase flexibility and drive down costs, France went the other way, underlining its commitment to a 35-hour workweek. This has been especially costly to automotive companies, Mr. Ferrand said. "What we have seen is a divergence of policy in France and Germany," he said. We are in a kind of vicious cycle. The government is expected to announce a rescue plan for the auto industry this month, though analysts say its room for maneuver will be limited by the need for fiscal discipline, to prevent France from being punished by the bond markets like its neighbors to the south. Mr. Da Silva, the IHS analyst, said the cost-cutting measures might help PSA through the crisis, but would not solve its underlying problems, which include a lack of consumer affection for its brands. "The real problem is that a customer who is willing to pay the list price for a Volkswagen is not willing to pay the list price for a Citroën," he said. When you step foot in a Citroën showroom it's an automatic 5 percent discount, which is not the case with a VW or an Audi.