Wires

UPDATE 5-Carmakers curb European production as coronavirus hits

Giulio Piovaccari and Edward Taylor

* Most of FCA's European plants closed through March 27

* Peugeot maker PSA also temporarily closing European plants

* Workers seeking stricter hygiene controls (Adds Ford's plant closure in Spain)

MILAN, March 16 (Reuters) - Carmakers including Fiat Chrysler, Peugeot, Volkswagen and its premium unit Audi throttled back production at their European plants on Monday as they grapple with the coronavirus crisis and plunging demand.

Worker representatives in Italy, France, Belgium, Spain and Germany have demanded stricter controls on hygiene, disinfection and isolation for employees working heel-to-heel on Europe's production lines.

Audi said it was struggling to keep production running at its plant in Brussels, Belgium, because some workers had downed tools over concerns they were exposing themselves to the virus.

The topic of how to protect employees was now the subject of discussions between management and unions, the carmaker said.

Fiat Chrysler Automobiles (FCA) is halting production for two weeks at most of its European plants to help protect staff and adjust to a slump in demand, the Italian-American carmaker said.

Italy has been the European country worst hit by the crisis and the first to enforce a nationwide lockdown, which has now been replicated by Spain and to a lesser extent France as the COVID-19 virus sweeps through the continent.

Measures in Italy were agreed after all-night talks with companies and trade union leaders to introduce tighter controls on workplace practices and cleaning protocols, as well as steps to encourage more home-working, Economy Ministry undersecretary Pier Paolo Baretta said.

French carmaker PSA, which owns the Peugeot, Opel and Vauxhall brands, also said it was closing its European factories until March 27.

'VERY BAD' MARCH

Ford said it was closing its plant in Valencia, Spain, for the rest of this week following a flurry of infections, and would reassess after talks with trade unions.

"We have had three positive cases of COVID-19 on the Valencia site in a 24-hour period, two of which involved more isolated workers who did not enter the assembly operations," a spokeswoman said on Monday.

Ford employees who had close contact with the affected workers are now in self-isolation.

"We will take all other appropriate steps to ensure that risk from this situation is minimized," Ford said.

Last week, some Spanish plants of the Renault-Nissan alliance and Volkswagen's Spanish division Seat announced temporary stoppages that could last for days or weeks.

On Monday, Volkswagen's Autoeuropa car assembly plant near Lisbon, Portugal, said it had reduced its daily output by 16% because of a shortage of workers after Portugal ordered all schools closed amid the coronavirus outbreak.

Volkswagen also said on Sunday it was preparing to suspend operations at its plant in Bratislava after Slovakia declared a state of emergency in response to the virus.

With non-essential services closed in several countries, including car dealers, and people forced to stay at home except for strict working needs, analysts are forecasting a heavy fall in March car sales and a 4% drop globally this year. nL8N2B42M6 3/8

FCA, which according to analyst estimates produces around 25% of its vehicles in Europe, said its plant suspensions through March 27 would allow it respond to interrupted market demand by optimising supply.

Marco Opipari, an analyst at Fidentiis, said a few weeks of closures were not a big problem in a European auto industry struggling with over-capacity, and lost production could be recovered later on.

"The real problem is on the demand side. People are not buying cars now, and sales volumes are expected to be very bad in March, with a real impact on automakers' earnings," he said.

The coronavirus crisis is hitting a European automotive industry already struggling with weak global demand and tough new pollution regulations.

The suspensions at FCA extend a temporary closure period already planned for some Italian facilities.

"The group is working with its supply base and business partners to be ready to enable our manufacturing operations to deliver previously planned total levels of production despite the suspension when market demand returns," it said.

Italy is still allowing manufactures to operate provided they comply with strict safety measures. However, a growing number of companies are opting to suspend production.

Last week, luxury carmaker Ferrari said it was closing its two plants until March 27, citing an emerging shortage of parts.

Premium brakes maker Brembo, whose clients include FCA's Maserati brand, said it would temporarily close its four Italian plants this week.

Unions at the Czech car factories of Volkswagen's Skoda Auto and Hyundai Motor Co have called for a 14-day quarantine for employees, which would halt production for that time, news agency CTK reported on Monday. (Reporting by Valentina Za in Italy, Joern Poltz in Munich and Jan Schwartz in Hamburg; Writing by Edward Taylor Editing by Mark Potter and Jan Harvey)