December 12, 2019

Renault to Reduce French Labor Force by 7,500

PARIS — France’s ailing industrial sector took another body blow on Tuesday, as Renault said it planned to cut 7,500 domestic jobs by 2016, or about 17 percent of its French labor force, as it adjusted production capacity to the crushing downturn in the European car market.

The plan, which the company said would save €400 million, or $540 million, in annual fixed costs, is needed to lower its “break-even point” — the amount of revenue needed to cover all outlays — and to “clear the way for the new hiring needed for the future.”

The company said that if unions agreed to the plan it hoped to reach its job target without any plant closings, layoffs or buyouts. It would accomplish its goal, it said, mainly by not replacing retiring workers and by offering early retirement.

“Not a single person will be laid off,” said Sophie Chantegay, a Renault spokeswoman.

Of the 135,000 people that Renault employs worldwide, more than 44,600 work in France. Ms. Chantegay said the plan to reduce jobs would affect only the French work force.

Over all, France has lost three-quarters of a million industrial jobs in the past decade, and President François Hollande has made it a priority to try to stop the hemorrhaging.

Like its larger rival, PSA Peugeot Citroën, Renault has been suffering from too much capacity in a weak market. But compared with Peugeot, which generates most of its sales in Europe, Renault has held up relatively well, thanks to international operations that include important alliances with Nissan Motor Co. of Japan and Avtovaz of Russia.

Still, Renault has fallen behind the German leaders. Daimler and BMW, as well as Volkswagen, have continued growing on the strength of their global operations.

Carlos Ghosn, Renault’s chairman and chief executive, said Monday at the Detroit Auto Show that he expected the European market to be “difficult” in 2013, predicting that car sales would fall about 3 percent in 2013, following an 8 percent contraction in 2012.

Renault said that in 2011 its break-even point had been “too close to the 2.72 million cars sold, representing a risk to the enterprise.” Considering the volatility of the car market in recent years and the persistence of uncertainty about the European outlook, Renault said it was now necessary to bring its break-even point about 12 percent below the 2011 sales level.

Gérard Leclercq, the head of Renault’s French operations, said in a statement after a meeting with representatives of the company’s unions that Renault had “reaffirmed its desire to maintain the core of its corporate activities and the heart of its business in France, while acting to reduce its break-even point and preserve its capacity for investment.”

Renault said natural attrition and job cuts announced under a restructuring deal signed in February 2011 would account for about 5,700 of the jobs it plans to eliminate by 2016. It said a “supplementary adjustment” would have to be made to the restructuring plan to bring the total number to 7,500.

Peugeot is planning to cut about 17 percent of its French workers, and last year it agreed to sell a 7 percent stake to General Motors, with which it is planning several joint projects. On Monday, the French newspaper La Tribune reported that Peugeot was in talks about acquiring G.M.’s troubled Opel unit in Germany. Opel denied that report; Peugeot said it did not comment on “rumors.”

Mr. Ghosn said Monday that Renault and Nissan would work together on new inexpensive cars, which Renault will sell in Europe, while Nissan would sell under the Datsun brand in India, Russia and Indonesia. The new common production platform will produce its first cars in 2015, he said.

Asked what governments and companies could do to address the contraction of the market in Europe, he noted that European sales did not fall as much as United States sales during the recession but had also been slower to recover. Governments should try to determine “why consumers are not buying cars,” Mr. Ghosn said.

Sergio Marchionne, the chief executive of Chrysler and Fiat, said Monday at the Detroit show that European carmakers were collectively losing €4 billion to €5 billion a year. “There has to be a day of reckoning,” Mr. Marchionne said. “No industry can continue to fund losses of that magnitude.”

Vindu Goel reported from Detroit.

Article source: http://www.nytimes.com/2013/01/16/business/global/renault-to-reduce-french-labor-force-by-7500.html?partner=rss&emc=rss

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