Outside the gleaming corporate headquarters of French car giant Peugeot Citroen, the news was far worse than expected.

France's biggest car maker is in trouble. Everyone knew that. But Thursday's announcement to cut jobs to the tune of 8,000 nationwide shocked both unions and politicians alike.

On the boulevard outside, against a backdrop of past models and future innovations, union representatives wasted no time in proclaiming their dismay to dozens of waiting journalists. Each one eagerly launched into withering condemnations before a press of news cameras.

Their language matched the widespread sense of shock and betrayal. It is a "declaration of war" against the employees said one union man. It is "an earthquake" said another.

Many of the union leaders present were from the Aulnay factory just a few miles outside Paris. It started production back in 1973 as a Citroen factory and occupies a special place in the company's history.

Company executives had insisted it would not close, but on Thursday they said it would, with the loss of over 3,000 jobs. For these men and women the news had a real personal impact.

The threat to Aulnay has come as a real blow. The news was quickly phoned through to the production line, and the workforce downed tools in protest. A general meeting was planned for Thursday afternoon.

A senior union spokesman told me Peugeot Citroen was using the financial crisis as an excuse to make the workers pay for past mistakes. He insisted that the often cited criticisms of French workers' lack of competitiveness were not true. He promised he and his members would fight the cuts tooth and nail.

Back in Paris journalists were invited inside the Peugeot Citroen offices to hear an announcement by the chief executive Phlippe Varin. He explained the terrible state of the company's finances. Faced by the global slowdown and the ongoing dramas of the Euro crisis, the company is losing over $200 million a month.

He said the company was determined to balance the books by the end of 2014. Over a billion dollars in savings have to be made.

All day the crisis in France's car industry has dominated the news channels and radio phone-ins. There has been no shortage of politicians keen to condemn the company’s move and promise a vigorous campaign to protect the workforce.

A government minister for social affairs went as far as to say she would not accept the job losses. Peugeot Citroen has received billions of dollars of government subsidy in recent years, she claimed. 8,000 job losses was not the return this new government was looking for.

Thursday’s news puts French President Francois Hollande in a difficult position. He was elected on promises of economic growth and a rejection of austerity. The Peugeot Citroen announcement and the inevitable future contraction of French industry will now be his primary challenge.