A major PSA Peugeot Citroen union is warning the French automaker risks bankruptcy as it continues to hemorrhage EUR7m (US$9.6m) per day.

Such enormous losses are forcing PSA to implement drastic cuts in its French operation, including axing up to 8,000 jobs and closing its Aulnay plant near Paris.

The moves have provoked massive opposition from unions in France, but one of PSA's labour bodies has raised the spectre of the automaker going to the wall unless urgent action is taken.

"It is reasonable to think about possible bankruptcy," Force Ouvriere automobile federal secretary, Jean-Yves Sabot, told just-auto from France.

"To lose EUR7m per day is not a situation that is possible to continue. Our confederation and other unions participate in all discussions. We have to get the business out of this big difficulty - this must happen with the workers as they are the richness of the business."

Force Ouvriere's more moderate stance - that has included presenting a 'white book' to PSA with its own proposals for the future - is in stark contrast to the automaker's hardline - and powerful - CGT union - that is currently supporting a strike at the Aulnay plant.

Video footage from the CGT shows a loud demonstration taking place together with fellow-union members from Renault's Cleon plant chanting: "No factory must close" as what appears to be smoke from burning tyres is clearly visible in the background.

The CGT has taken heart from this week's ruling by the Paris Court of Appeal that the Faurecia Interieur Industrie (FII) division must consult with its labour body on the "eventual consequences" of its reorganisation. PSA holds 57% of Faurecia.

A statement sent to just-auto by Faurecia in Paris notes: "The Court of Appeal, in its ruling of 28 January, considers FII must put into place an information/consultation procedure with its Works Council on the eventual consequences, for itself, of PSA's restructuring plan, before implementing the reorganisation.

"As a result, Faurecia Interieur Industrie will start this consultation immediately."

Despite that setback, PSA is welcoming the show of support from the Force Ouvriere union as both parties look to stem such enormous losses in the face of plunging European demand.

"I would like to emphasise how much I respect the hard work, commitment and exemplary attitude displayed by the vast majority of employees at Aulnay since last July," PSA Aulnay plant manager, Laurent Vergely, said.

"Once again, I promise to ensure that two fundamental, inseparable rights are upheld within the plant - the right to strike and the associated right to work."