Renault to cut 7,500 jobs in France
PARIS — France’s ailing industrial sector took another blow Tuesday when Renault said it planned to cut 7,500 domestic jobs, or about 17 percent of its French labor force, by 2016 as it adjusted production capacity to the crushing downturn in the European car market.
The plan, which the company said in a statement would save 400 million euros, or $540 million, in annual fixed costs, is needed to lower its break-even point — the amount of revenue needed to cover 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 could reach its job target without 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 Renault employs worldwide, more than 44,600 work in France. Chantegay said the job cuts would affect only the French workforce.
Overall, France has lost three-quarters of a million industrial jobs in the past decade, and President Francois Hollande has made it a priority to stop the hemorrhaging.
Like its larger rival, PSA Peugeot Citroen, Renault has had 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, partly as a result of international operations that include important alliances with Nissan Motor 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, after contracting 8 percent in 2012.
In its statement, 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.” Renault said that considering the volatility of the market in recent years and the uncertainty about the European outlook, it was now necessary to bring its break-even point about 12 percent below the 2011 sales level.
Gerard Leclercq, the head of Renault’s French operations, said in a statement after 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 planned to eliminate by 2016. It said a “supplementary adjustment” would have to be made to bring the number to 7,500.