Renault On The Verge Of Cutting Down Jobs In France


Three of Renault Group’s four main French unions have signed an agreement with the automaker on a plan to eliminate 1,700 jobs in exchange for guarantees on production targets and new model allocations.

The job cuts, part of a 2020 plan to save more than 2 billion euros ($2.3 billion) in operating costs, will be made from 2022-24, with the greater part in 2022, but will not involve forced layoffs. Renault had earlier agreed to reduce the number of cuts from 2,000.

During that period, Renault agreed to recruit 2,500 laborers in France, with 2,000 at production locales, and to give need to employing more women.

Renault, which lost a record 7.29 billion euros in the first half of 2020, plans to dispense with almost 15,000 jobs around the world – incorporating 4,600 in France – – and cut its production limit by 18%.

The automaker has declared the work accord that it would base nine new models in France and target yearly production of in excess of 700,000 vehicles in the country.

The CFE-CGC, CFDT and FO associations, representing 79% of French workers, agreed to the arrangement, Renault revealed. In any case, in a separate statement, the hardline CGT dismissed it.

Getting arrangement for the cuts has been politically tricky for CEO Luca de Meo and Chairman Jean-Dominique Senard, who face pressure from the French government, who is Renault’s most remarkable shareholder.

As indicated by the automaker, making electric vehicles (EVs) requires less workers than vehicles running on ignition motors, and Renault has promised to try not to close manufacturing plants totally. It is currently changing the Flins processing plant close to Paris over to “roundabout economy” activities like reusing from assembly.

Renault agreed not to close sites covered by the latest accord, including industrial, logistics, parts and accessories plants, nor will it close the technical engineering facilities in Lardy and Aubevoye, it said.

The company is also planning on retraining some workers in skills required for EVs. There will also be annual salary reviews over the life of the contract.

As part of the agreement, unions pressed Renault for clarity on model allocation and production targets. Of the nine new models, Renault said the “majority” would be full electric.

Meanwhile, the “ElectriCity” factory hub in northern France will build the Megane E-Tech Electric, the future Renault 5 EV, the Kangoo electric van, a “future electric SUV” expected to be a compact model, “and a new vehicle that is still in its early stages,” likely to be a retro-themed EV based on the Renault 4L of the 1960s.

A future 100 kilowatt electric motor “and its entire value chain” will be built in the Cleon factory, now a center for internal combustion engines, and the Le Mans factory will build chassis for the new vehicles.

Plants at Dieppe and Sandouville will produce the new Alpine and an electric medium Trafic van, while Batilly will produce a replacement for the large Master van and “a vehicle from a partner.”

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credits: Blomberg and CNBC

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