Falling sales of lorries mean Fiat Industrial’s Iveco is to shut five plants by the end of this year.
They are at Chambery in France; Graz in Austria, and the German factories at Ulm, Weisweil and Goerlitz.
A total of 1,075 workers will either lose their jobs or be redeployed.
Iveco’s chief executive Alfredo Altavilla said the “painful closures” will boost the overall business.
Altvavilla said he would provide a cost savings figure during the company’s conference call for its second-quarter results on July 30.
The company’s plan to invest 500 million euros in Spain and hire 1,100 new workers there would not be affected by the plant closures, he said, adding that he expected to hire the first 500 in Spain by year-end.
At the same time Fiat chief executive Sergio Marchionne said Italian car sales posted a double-digit fall in June.
He confirmed his forecast for full-year car sales of about 1.4 million vehicles in 2012, saying the market had not suffered further deterioration last month.
“The decline for June will be less than 20 percent, but it’s still a double-digit figure,” Marchionne said.