Renault is to cut 17% of its French workforce in the next four years to reduce costs but won’t close any factories, Bloomberg News reported on Tuesday (15 January).
The move came as the European market is expected to contract for a sixth consecutive year in 2013.
Renault plans to eliminate 7,500 positions to the 2016 at its French operations, Sophie Chantegay, a Renault spokeswoman told Bloomberg. The automaker will cut 5,700 of the posts through attrition, she said.
However, Renault CEO Carlos Ghosn said the company wasn’t planning any factory closings in France.
He had said separately earlier today in Detroit that the European car market would drop another 3% this year after contracting in 2012 to a 20 year low. PSA Peugeot Citroen, Ford and General Motors Co. (GM) are reducing workforces and closing plants in response to plunging demand amid recessions in the region.
“If an agreement is signed with unions, this staff redeployment would require neither a plant closing nor any forced departures,” Gerard Leclercq, Renault’s head of operations in France, said in a statement cited by Bloomberg. Renault notified unions today that the cuts were needed for its automotive operations in France to break even, he said.
Citing ACEA data, Bloomberg noted Renault’s 19% sales drop in Europe in the first 11 months of 2012 was the steepest among major producers there as industry-wide registrations fell 7.2%.
Marchionne told a Detroit press conference Europe’s volume car industry was in a painful situation, with no one making money. His request for a European Union plan to cut automaking capacity to match demand had been “ignored,” he said.