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French Workers Protest Mass Layoffs

France's workers, including French employees of U.S. manufacturing giant Caterpillar, tapped their rich tradition of labor protests this week to try to resist the global economic downturn.

PARIS (AP) -- French workers stage a sit-in at a Royal Bank of Scotland subsidiary in Lyon. French employees of U.S. manufacturing giant Caterpillar, Inc. march on Paris to ask the government to save their jobs. And French tire makers for Germany's Continental AG fight to save their factory.

France's workers tapped their rich tradition of labor protests this week to try to resist the global economic downturn -- and they weren't afraid to reach across borders to target any business that employs the French.

These outbursts may have little overall effect on global companies such as Caterpillar or RBS with much bigger problems than some unhappy French laborers. But those workers are making their voices heard and, sometimes, getting what they ask for.

Overall, France has been hit less hard by recession than countries such as nearby Britain or Spain, both of which had more household debt and lighter government regulations than France going into the economic crisis.

But French workers are facing job losses, too, many at foreign-owned companies. Labor activists get particularly riled at companies that announce layoffs when they are still making a profit -- even if the profit is on the decline.

That is at the heart of the dispute over two Caterpillar factories in the French Alps.

The Peoria, Illinois-based company announced 22,000 job cuts in recent months including about 700 in France because of sinking demand for its equipment -- while reporting a profit of $661 million in the fourth quarter and record sales of $51 billion in 2008.

Caterpillar workers burned tires at a protest in Grenoble last week and then came to Paris this week to ask the Finance Ministry to intervene with their U.S. bosses to keep two factories open. The French government has made no promises so far, but their bid has drawn national media attention.

Caterpillar's French management said in a statement announcing the job cuts last month that "the degradation of the market is even stronger than what was forecast at the start of the year" and said the company needed to cut costs.

Royal Bank of Scotland didn't have the profit problem: It reported losing 24.1 billion pounds in 2008, the biggest loss ever reported by a British company.

Among those hit by indirect fallout were some 133 workers for a French auto parts company, Preciturn.

Preciturn's accounting activities were run by RBS Factor, a heavily indebted subsidiary of the British bank. RBS Factor abandoned its contract last month, leaving Preciturn with more than euro200,000 in unpaid bills and no money to pay upcoming salaries, according to Gerard Sugier of the CFDT union.

So nearly 40 workers entered the RBS Factor office in Lyon on Tuesday and staged a 30-hour sit-in, eating, sleeping and playing cards in hallways while union leaders negotiated a deal that saw euro149,000 transferred immediately to the auto parts company with the rest promised within days, Sugier said.

"We are very relieved. We can finally work calmly and deliver to our clients and pay salaries. But it's problematic that we had to get to this point," he said.

Another example: A tire-making factory north of Paris run by Germany's Continental is under threat of closure. The plant's bosses came to the French capital on Tuesday to ask the junior minister for industry, Luc Chatel, for help.

Chatel appeared to take the workers' side.

"We have laws in France, social laws that foresee that companies that plan restructuring in factories with more than 1,000 workers ... are made to justify the economic motives of their restructuring," he told reporters Wednesday.

Continental's sales climbed last year despite uncertainty in the automotive industry, but the company has long considered the French factory too costly to maintain.

Alexander Law, economist at French market research company Xerfi, said the French government is keen to keep unemployment from rising too sharply, and so "will have a tendency to defend workers as much as possible" amid the crisis.

That could confirm foreign businesses' fears about France's strict labor laws.

"The accent will be placed on defending workers at the risk of discouraging foreign investors a bit," he said.

Associated Press writers Thierry Boinet in Grenoble, France and Scott Sayare in Paris contributed to this report.

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