UPDATE 1-Cutbacks at Peugeot and Renault meet growing resistance

Tue Jan 29, 2013 12:14pm EST

* Auto workers stage protests at several sites

* Peugeot cuts suspended temporarily

* Renault CEO Ghosn under pressure on pay (Adds protests at Le Mans, Douai and Maubeuge plants)

By Gilles Guillaume and Laurence Frost

PARIS, Jan 29 (Reuters) - Labour tensions at France's carmakers took a turn for the worse on Tuesday as Renault workers protested over planned cuts and PSA Peugeot Citroen's restructuring plan hit a legal setback.

While Renault staff demonstrated at the company's Flins plant west of Paris and Peugeot workers marched on company headquarters, the carmakers pursued union talks on plans to improve productivity and eliminate close to 8,000 jobs each.

"As things stand now, the conditions are unacceptable," CFDT union chief Laurent Berger said of Renault's proposals for a new nationwide labour deal.

Peugeot, the carmaker worst hit by Europe's deep auto sales slump, is struggling to shed costs and lift sales in its effort to return to profit in 2015. Renault, cushioned by earnings from its Dacia low-cost cars and a 43.4 percent stake in Japan's Nissan, is also grappling with industrial overcapacity as sales of French-built models plunge.

The CFDT, France's biggest private-sector union, also increased pressure on Renault boss Carlos Ghosn by echoing calls from within President Francois Hollande's socialist government for a cut to the chief executive's salary.

"Workers can't be asked to make sacrifices unless the CEO is asked to make sacrifices," Berger said on BFM Television.

The government, Renault's biggest shareholder with a 15 percent stake, attempted to trim Ghosn's pay at a board meeting in December, Finance Minister Pierre Moscovici said in a Monday radio interview, without giving details.

Ghosn earned 2.79 million euros ($3.76 million) from Renault in 2011 and 9.92 million from Nissan in its corresponding financial year, making him one of the highest-paid CEOs in France or Japan.

About 500 workers staged a protest in front of Renault's Flins plant, where production of the Clio has dwindled as more of the sub-compact vehicles are assembled in Turkey.

A similar number of Renault staff demonstrated at a chassis facility in Le Mans, while hundreds more downed tools at plants in Maubeuge and Douai, northern France.

COURT ORDER

Renault is cutting 7,500 jobs over three years without compulsory redundancies and is demanding union concessions on pay, flexibility and working hours in return for guarantees to keep French plants open.

Unions, meanwhile, are demanding firm commitments on production volumes in France as part of any deal.

Peugeot's plan to close a plant and eliminate 8,000 positions across France faces possible delays after the Paris Appeals Court ordered a temporary halt to the restructuring to allow additional consultations with workers.

At the Peugeot Aulnay plant, earmarked for closure in 2014, production of C3 sub-compacts continued at a trickle amid protests.

Workers from the plant, which reopened on Monday after a strike and 10-day closure, were called upon by the CGT union to march on Peugeot's head office in Paris.

Negotiations on the cuts continued on Tuesday, but final implementation must now wait until Peugeot also completes formal talks ordered by the court at two sites belonging to parts division Faurecia.

The CGT union argued successfully in court that workers at two Faurecia sites would be affected by Peugeot's cuts and should have been included in consultations.

"It's a restructuring that has an impact on Faurecia's activities," CGT lawyer Fiodor Rilov said. "As a result, workers' representatives have to be informed and consulted."

Peugeot shares closed 1.7 percent lower, wiping out a gain of about 1 percent before publication of the court ruling. Renault shares ended 1.3 percent higher.

Peugeot said talks on the cutbacks were going ahead on Tuesday as scheduled and would continue on Feb. 5 and Feb. 12.

"The negotiations are not suspended and will continue to make progress," a company spokesman said. He gave no new time frame for implementation, which the company had previously aimed to begin in February or March. ($1 = 0.7429 euros) (Additional reporting by Nicholas Vinocur; Editing by David Goodman and Helen Massy-Beresford)

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