* Peugeot tells unions concessions needed to keep plant open
* Confirms extension of French worker buyouts and retraining
By Laurence Frost and Gilles Guillaume
PARIS, May 30 (Reuters) - French automaker PSA Peugeot Citroen has asked workers at its Sevelnord plant to agree to a pay freeze, hundreds of job cuts and other concessions, or face possible closure, officials at two unions said.
The company is opening talks on plans to reduce the threatened plant's 2,700-strong workforce, freeze salaries for at least three years, reduce leave and impose more flexible hours, CGT and CGC union representatives told Reuters.
Peugeot declined to comment on plans for Sevelnord. Its ultimatum, if confirmed, echoes tactics successfully employed to win concessions from workers at Fiat's Pomigliano factory near Naples and General Motors' Opel plant in Ellesmere Port, north-west England.
"This amounts to industrial blackmail," said Ludovic Bouvier of the CGT, Peugeot's biggest union. "They want us to set an example that workers in the rest of the group's factories will eventually have to follow."
The Paris-based automaker, heavily exposed to southern European markets at the sharp end of the region's debt crisis, is selling assets, slashing costs and freezing some investments after its manufacturing division swung to a loss last year.
Peugeot managers outlined their demands on May 25, ahead of formal negotiations to begin on Friday, said Bouvier and Pascal Lucas, his counterpart with the smaller CGC.
Without the concessions from Sevelnord workers, the next generation of the plant's Peugeot Expert and Citroen Jumpy delivery vans would be produced in Vigo, north-west Spain, both union officials said they were told.
Besides the salary freeze, the plan would lead to "several hundred" job cuts, both union officials said. Some of the laid-off workers could be rehired to produce the new vehicles.
It would also give managers more leeway to impose overtime or the use of vacation days at short notice, in step with production demands, they said.
The plant in northern France, shared with Fiat, faces an uncertain future as the Italian automaker prepares to withdraw production of its Scudo van from the joint venture.
Peugeot is in talks with Fiat to unwind the venture before its expiry in 2017, and has said it is seeking a new partner there.
Even with both of those steps completed, "we would still need to ensure that Sevelnord is competitive by comparison to alternative sites", company spokesman Pierre-Olivier Salmon said on Wednesday.
The company said it will extend eligibility for voluntary redundancies and retraining to a larger group of French workers, after signing up only 623 of the 1,900 candidates it had targeted this year.
The programme is part of an overall target of 6,000 European job cuts for 2012 - to be achieved without compulsory lay-offs -announced last September by chief executive Philippe Varin.