UPDATE 2-Michelin cuts 700 jobs in French factory overhaul
(Adds company announcement, comment, investment plans)
PARIS, June 10 (Reuters) - French tyremaker Michelin announced 700 domestic job cuts on Monday, becoming the latest autos industry manufacturer to slash staffing in response to the European downturn.
The world's second-largest tyremaker also unveiled 800 million euros ($1.1 billion) in planned investments to improve competitiveness and boost exports from its home country.
The jobs will go as Michelin winds down the Joué-lEes-Tours plant in central France in 2015 and expands capacity to double truck tyre output from another facility in La Roche-sur-Yon.
The move will make the western coastal site a major production centre for export and "achieve the best standards of competitiveness thanks to scale effects", Michelin said in an emailed statement.
Apart from luxury carmakers cushioned by buoyant export demand, Europe's auto industry has been hit hard by the euro zone's debt crisis and austerity drive, with vehicle sales nearing a 20-year low and tyre demand also sagging.
Companies including PSA Peugeot Citroen, Ford and Faurecia have already announced thousands of job cuts, and Michelin warned in April it would be forced to follow suit unless the market picked up.
Michelin's shares were trading 0.2 percent lower at 68.27 euros by 1024 GMT.
The company, which employs 63,000 people in Europe including 24,000 in France, also said it would take a 135 million-euro restructuring charge in its results for the first half of 2013.
As part of the investment programme Michelin will spend 145 million euros to increase capacity by 30-40 percent at two factories producing outsized tyres for earthmoving equipment, one of its most profitable product categories.
A further 220 million euros is earmarked for upgrading the company's main research and development centre near its headquarters in Clermont-Ferrand, central France.
Workers at the Joué plant downed tools earlier on Monday as their representatives were briefed on the cuts by management.
The company pledged to make 250 of the job losses through early retirement and offer transfers to a further 480 staff, with 200 of the 930-strong workforce staying on in non-production roles.
"This is like a hammer blow," Force Ouvriere union leader Jean-Claude Mailly said on France 2 television. "With 700 jobs (going) out of 900 it's hard to imagine what will be left."
Michelin also said it would halt truck tyre production in Algeria later this year and sell its local plant to the country's Cevital group, which has pledged new jobs for all of the plant's 600 workers. ($1=0.7564 euros)
(Additional reporting by Dominique Vidalon; Editing by Greg Mahlich)