The last car rolled off the assembly line at PSA Peugeot Citroen's factory in Aulnay-sous-Bois on Friday, marking the end of four decades of production at the plant on the outskirts of Paris.
Faced with a shrinking domestic market and burning through cash, Peugeot is shutting the plant at a cost of 3000 jobs, part of a restructuring plan to save €1.5 billion ($2.16 billion) by next year. The company says closing the plant is essential for reducing overcapacity, a problem for many European car makers.
The company has five other plants in France, and Aulnay's importance had declined amid ebbing profitability for the cars it produced. Of 2.9 million vehicles that Peugeot made last year, only 120,000 came from Aulnay.
Over the years Aulnay has produced nearly 8.7 million vehicles, the last car on Friday a Citroen C3 supermini. Peugeot said the car market in the European Union would shrink about 4 per cent this year, and it is desperately looking for ways to gain access to growing economies beyond Europe.
To that end it has been talking with the French government and its Chinese partner, Dongfeng Motor, about the possibility of replacing the founding Peugeot family as its largest investors, according to a Reuters report. The negotiations are complicated by the fact that General Motors owns a 7 per cent stake in the French company and has its own agenda in China.
The closure came as a painful shock for the northern suburb of Aulnay-sous-Bois, which is in an area where good jobs are scarce amid France's 11 per cent unemployment rate. The government took the company to task over the plan but later acknowledged it was a commercial necessity.