UPDATE 1-Riot police save France's Pinault from workers

Tue Mar 31, 2009 9:28pm BST

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* Billionaire Pinault blocked by protesters

* Managers at Caterpillar factory barricaded in office

* Labour relations in France increasingly tense

(Adds background, updates Caterpillar, Continental protests)

By Crispian Balmer

PARIS, March 31 (Reuters) - Angry shop workers facing the sack blocked French billionaire Francois-Henri Pinault in a taxi on Tuesday before riot police were called in to clear away the protesters, officials and police said.

Pinault, chief executive of retail and luxury group PPR (PRTP.PA), was surrounded in a car in central Paris by staff from two of his stores that have announced 1,200 job cuts.

"They briefly delayed Mr. Pinault's car as he was leaving a company meeting," said a spokesperson for the group.

French radio said he was blocked for an hour before the CRS riot police, brandishing shields, secured his release.

Pinault, one of France's wealthiest men, is the latest businessman to fall foul of protesters in France, with labour relations deteriorating during the sharp economic downturn.

Earlier on Tuesday, dozens of workers at a factory run by U.S. company Caterpillar Inc (CAT.N) blocked five managers in their offices in southeast France and demanded further talks on plans to lay off some 733 employees.

One of the managers was released in the early evening for health reasons, but employees told French television they planned to keep the other four barricaded in an office overnight to press their case for more generous redundancy terms.

"The actions that are taking place today, led by a small minority of individuals, are not helping as we work for a positive resolution of this situation," Chris Schena, a Caterpillar executive, said in a statement.

SCAPEGOATS

Directors at plants run by Japan's Sony (6758.T) and U.S. group 3M (MMM.N) were also held hostage in March in separate disputes over redundancies. On both occasions, unions said they managed to wring extra concessions from the executives.

Police have previously been reluctant to intervene to avoid fomenting violence and Pinault is the only businessman who has so far been freed by the security forces.

Business leaders speaking in private have expressed increasing concern at the situation and say they are being made scapegoats for a crisis that was not of their making.

French managers working for German tyre maker Continental (CONG.DE) decided to hold an important works council meeting in the southern city of Nice on Tuesday, hundreds of kilometres (miles) from the firm's factory for fear of possible violence.

When bosses announced on March 12 that they were eliminating 1,120 jobs and closing Continental's Clairoix plant, they were pelted with eggs and had to run for cover.

France has a long tradition of street protests, with labour conflicts often degenerating into a show of force between unions and bosses.

Government officials have said they are worried that the situation could spiral out of control, with job losses piling up and French workers appearing increasingly militant. (Additional reporting by Elizabeth Pineau)

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