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Peugeot and Renault push on with restructuring moves

By Gilles Guillaume and Laurence Frost

PARIS (Reuters) - PSA Peugeot Citroen won staff agreement on Tuesday for an early wind-down of its doomed Aulnay plant, as rival French carmaker Renault pressed unions to sign a new national labor deal.

The moves by both French automakers, designed to address a crisis of overcapacity and falling sales, have divided unions and sparked protests and stoppages at sites around the country.

Peugeot, which has announced 8,000 job cuts and the planned closure of the Aulnay plant on the northern outskirts of Paris in 2014, presented plans to begin moving half of the factory's 3,000 workforce to another plant near the capital within days or weeks - more than a year ahead of schedule.

The company said the early transfers were requested by several unions following reported incidents of intimidation and violence against workers defying the leftwing CGT's strike call.

"We are ready to carry them (the transfers) out as quickly as possible for everyone's benefit," Peugeot spokesman Jean-Baptiste Thomas said.

"Aulnay workers are under a lot of pressure," Thomas said. "It's hard to put up with the kind of threats and assaults they are suffering on a daily basis."

Peugeot, badly hit by Europe's auto sales slump, is struggling to cut costs and lift sales in an effort to return to profit in 2015. Renault is also wrestling with domestic overcapacity as sales of its French-built models plunge in a stricken European market.

The plans for an early departure of Aulnay workers were backed by the center-left CFTC, CGC and SIA unions at Tuesday's works council and may be adopted on February 15.

That would clear the way for Aulnay to shrink to one factory shift from two, as 1,500 workers begin moving to the Poissy plant west of Paris, which assembles the same Citroen C3 model.

POSSIBLE DELAYS

"Our request is prompted by the situation at Aulnay," CFTC official Franck Don said. "People are afraid and we have to do something before anything more serious happens."

The transfer of workers will not lead to inventory shortages, Peugeot said. Aulnay production is already at a near-standstill because of the protests and a high absentee rate among non-striking workers.

Despite the likely progress towards closing Aulnay, Peugeot's broader restructuring faces possible delays resulting from a successful court challenge by the CGT.

The union has also vowed to contest Renault's proposed labor deal if the carmaker cuts corners on working-time changes that may require cancellation of existing accords with 15 months' notice.

Besides 8,200 job cuts over three years, Renault is seeking a pay freeze, longer working hours and flexibility measures including the right to move workers between sites, which the CGT has ruled out supporting.

"I don't see how any union could sign an agreement with such damaging social consequences that also increases inefficiencies," CGT spokesman Fabien Gache said.

"When there are fewer and fewer of us it gets harder to maintain quality."

The French government, Renault's biggest shareholder with a 15 percent stake, expects the car maker to reach a deal on the new labor agreement, an official source said.

Ministers had initially sided with auto workers and urged Peugeot to scale back its restructuring plan announced last July, but have since dropped their demands.

Industry Minister Arnaud Montebourg, one of the plan's most vocal early critics, said it was "inevitable" that Aulnay would close. "In any case we haven't found any other solution," he said on RTL radio. "We can't see any other way around this."

(Additional reporting by Elizabeth Pineau; Editing by David Holmes)

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