Restructuring by French carmaker comes as Covid-19 crisis hits manufacturing
Employees wearing protective face masks work on a Renault assembly line in France.
Photograph: Gonzalo Fuentes/Reuters
The French carmaker Renault plans to cut 14,600 jobs as it aims to save €2bn (£1.8bn) in one of the deepest restructuring programmes prompted by the coronavirus pandemic across the global car industry.
Renault will cut 4,600 jobs in its French operations, which will undergo a major reorganisation, and another 10,000 around the world.
The cost-cutting is on a similar scale to Nissan, Renault’s alliance partner, which on Thursday announced the closure of its Barcelona car plant as part of a restructuring plan. The two companies have rejected proposals to merge their operations fully but have committed to letting one of the carmakers “lead” in each global region.
Renault said it would cut its global production capacity from 4m vehicles in 2019 to 3.3m by 2024, a marked change in strategy from the expansion planned by the ousted former leader Carlos Ghosn, now a fugitive from Japanese justice in Lebanon.
Closures could include a foundry in Brittany and either the Douai or Maubeuge plants. Major changes will also be considered at factories in Flins and Dieppe.
The carmaker will also abandon producing combustion engine cars in China, with Dongfeng buying out its joint-venture partner.
The renewal of the Renault-Nissan alliance has led to reports that the French carmaker would consider having Nissan’s Sunderland plant build two Renault models currently made in Spanish factories.
However, Renault’s interim chief executive, Clotilde Delbos, said on Friday that nothing had been decided on model allocation and it is understood that more detailed production plans will not be drawn up until after the incoming boss Luca de Meo begins work on 1 July.
Renault’s job cuts are likely to have been agreed with the French government, which has been in discussions about providing an emergency €5bn loan guarantee for the carmaker to get through the pandemic. However, the cuts come after Renault reported its first annual loss in a decade in February, before the worst of the pandemic. The French state owns 15% of the carmaker.
The French president, Emmanuel Macron, this week said that electric car production should be the priority for the country’s car industry as he announced €8bn in aid for the sector, not including the Renault loan.
Renault’s restructuring will result in its core French operations focusing more on battery electric cars, as European carmakers seek to meet tightening emissions limits.
Delbos said: “In a context of uncertainty and complexity, this project is vital to guarantee a solid and sustainable performance, with customer satisfaction as a priority.
“By capitalising on our many assets such as the electric vehicle, by capitalising on the resources and technologies of Groupe Renault and the alliance, and by reducing the complexity of development and production of our vehicles, we want to generate economies of scale to restore our overall profitability and ensure our development in France and internationally.”