European automakers ready for Detroit-like cuts

Factory closures are no longer the "taboo subject" they were when the industry faced the first wave of crisis after 2008, said Laurent Petizon, a Paris-based director for consultancy AlixPartners, which advised GM on its state-aided turnaround.

"There seems to be a growing realisation that overcapacity needs to be dealt with."

CONTRASTING FORTUNES

Three years after the drastic cuts demanded by U.S. President Barack Obama's administration in return for public cash, GM and Chrysler are reporting strong earnings, even with the U.S. market still below pre-crisis levels.

Global No.1 GM, which shed four brands, 14 U.S. plants and 21,000 jobs, posted a record profit of $7.6 billion last year, while Chrysler netted $183 million under new parent Fiat after a similar tightening of its belt.

In Europe, where the industry was barred from closing factories in return for billions in state loans, scrappage bonuses and other life support subsidies, most mass automakers now appear locked in a downward spiral.

PSA Peugeot Citroen, Renault and Fiat - along with Ford in Europe and GM's Opel - are struggling to stay profitable and in most cases failing.

Peugeot is leading the losses, and the charge, with plans to cut more than 10,000 French jobs and carry out the country's first car plant closure in two decades.

Fiat, which shuttered one Italian plant last year, has warned it will close another unless it can build vehicles competitively for U.S. export.

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