Renault unions reject cost-cutting plans, report says

Automotive Industry

Source: Automotive News Europe, 2020-09-29

The four main unions representing employees at Renault oppose its cost-cutting plans, French union sources said, adding to the automaker's restructuring headaches. Renault has outlined €2bn ($2.3bn) in savings, including via job cuts and reorganizing its factories, to restore profitability. The automaker reported a record first-half loss of €7.29bn ($8.58bn).

Employee representatives only have a consultative role in the plans but rejecting them would complicate the task for new CEO Luca de Meo. De Meo, who arrived in July, had called on staff to back him in a recent internal memo seen by Reuters, saying: "I need you to carry out this turnaround."

The CFE-CGC, CFDT, CGT and Force Ouvriere unions rejected Renault's plans at a meeting with representatives of the company on Tuesday 29 September, four union sources said.

The CFE-CGC union confirmed its opposition to the cuts in a statement, saying it was not convinced by the way Renault planned to go about its plans even if it understood the economic imperatives.

Renault declined to comment.

Like its peers, the company has been hit hard by the coronavirus crisis, which forced it to halt production earlier this year while dealerships also closed temporarily.

This exacerbated existing problems with profitability. De Meo now wants Renault to produce fewer cars while improving margins. The automaker plans to cut 15,000 jobs worldwide in the next three years, including 4,600 in France.

Unions have rejected wide-ranging layoff plans by other automakers in France before, including at PSA Group in 2012. This has not stopped them from going ahead.

But PSA managed to get unions on board for subsequent competitiveness agreements, which included wage freezes.


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