Renault to restructure factories, confirms 15,000 job cuts

Representative Image. (Credits: Reuters)
PARIS: Carmaker Renault said on Friday it was launching talks with unions to restructure some French plants and potentially close others as it confirmed plans to cut around 15,000 jobs worldwide to ride out a slump in sales.

Faced with a downturn in demand that has been exacerbated by the coronavirus crisis, Renault is aiming to find 2 billion euros ($2.22 billion) in savings over the next three years as it shrinks production and hones in on more profitable models.

Renault said the restructuring measures, including the job cuts and employment transfers that would affect just under 10% of its global workforce, would cost 1.2 billion euros.

The group, which is 15% owned by the French state, said some plants like the one in Flins, close to Paris, where it makes its electric Zoe models, could cease to assemble cars and centre on recycling activities instead.

Six sites in all, including component factories, will be under review.

Renault, like its Japanese partner Nissan, was already under pressure when the coronavirus pandemic hit, posting its first loss in a decade in 2019. Like peers, it is now trying to juggle a revenue slump with industry-wide changes like rising investment in cleaner cars.

Renault said it would slash costs by cutting the number of subcontractors in areas such as engineering, reducing the number of components it uses, freezing expansion plans in Romania and Morocco and shrinking gearbox manufacturing worldwide.

The company plans to trim its global production capacity to 3.3 million vehicles in 2024 from 4 million now, focusing on areas like small vans or electric cars.