US tyre maker Goodyear said on Thursday that it was set to close a loss-making plant in Amiens, northern France, which employs 1,173 workers, following a long struggle with trades unions, reports AFP.
"Closing the factory is the only option after five years of unsuccessful negotiations," said a French-language statement issued by Goodyear Dunlop Tires France, which employs about 3,200 employees in the country across four sites.
It added that the plan had been presented to a management-employee committee and would be the basis of talks with workers' representatives.
Chairman Henry Dumortier said: "We are fully aware of the impact of the announcement we are making today and the plan's heavy consequences for staff, their families and local communities."
He added: "We are deeply disappointed that five years of negotiations were not enough to reach a compromise with representatives of workers at Amiens Nord. Today's announcement was the only option left to us."
Production of low-end tyres for passenger vehicles and farm equipment at the plant resulted in a loss in 2011 of 61 million euros ($83 million) according to Goodyear figures.
The decision was taken against a background of weaker demand for autos that threatens 20,000 jobs in France, where the new Socialist government has vowed to stem rising unemployment this year.
In addition to Goodyear, automakers Peugeot Citroen and Renault have announced restructuring programmes that combined could see almost 19,500 jobs eliminated by 2016.
Franck Jurek, a leader of the CGT trade union at the Goodyear plant, said: "We have been battling for six years against 400, 800, 1,200 job cuts, we are going to keep fighting."
A new management-employee committee meeting was scheduled for February 12, the CGT said, while forecasting a big turnout by workers.
Goodyear said that closing the tyre plant was a decision "aimed at remaining competitive in the tourism and agricultural sectors."
A spokesman told Dow Jones Newswires the company faced "a very difficult economic situation with tough competition from Asian countries and a constant decline in demand."
French President Francois Hollande had paid a visit to the Amiens factory during his electoral campaign, calling for more workers rights, in cases where companies were still making profits.
His administration now faces multiple job-cutting plans including those by Peugeot Citroen and Renault as the auto sector struggles to get to grips with serious surplus capacity amid slumping sales.
Amiens Mayor Gilles Demailly, a member of Hollande's Socialist Party, called Goodyear's decision "unacceptable" and said he wanted to meet with Industrial Renewal Minister Arnaud Montebourg to discuss what had become a "national issue."
"Announcing the plant's complete closure is even worse than we could have imagined," the Amiens mayor told AFP, before warning that the city's industrial zone "will be largely decapitated."
French job cuts also loom on the horizon in the steel, chemical and retail sectors, while the number of unemployed already stands at 3.13 million people, around 10 percent of the workforce.
Read more of this report from AFP.