Renault to slash 14,600 jobs in €2bn cost-cutting plan

Renault plans to cut 14,600 jobs, shrink production and restructure some of its French factories as the carmaker looks to slash €2bn in costs amid falling demand and the aftermath of the 2018 arrest of Carlos Ghosn.

With profits almost wiped out last year and sales slumping, Renault is trying to achieve more than €2bn in savings over the next three years while cutting global production capacity from 4m vehicles in 2019 to 3.3m by 2024.

Before his arrest on charges of financial misconduct in Japan, former Renault chief Mr Ghosn had targeted selling more than 5m vehicles by 2022.

Now, as part of its turnround plan, Renault said it was launching discussions with unions to repurpose plants in France, some of which could stop making cars altogether, and which would involve job cuts.

The group has not made final decisions about the future of six sites in France, including at Flins and Dieppe, as it faces both political and union opposition.

The 14,600 planned job cuts across the group will be “based on retraining, internal mobility and voluntary departures” and include a reduction of 4,600 staff in France. Renault employs more than 180,000 globally.

In a statement on Friday, Renault chairman Jean-Dominique Senard said: “I have confidence in our assets, our values and the direction of the company to succeed with the envisaged transformation and to return our group to its full value by deploying this plan.”

Renault’s cost-cutting plan, which will cost roughly €1.2bn to implement, will lean on a new strategy outlined by its alliance with Nissan and Mitsubishi on Wednesday which will see the three groups carve up responsibilities across the partnership.

The strategy aims to cut costs of new vehicle development by up to 40 per cent and for each new model, the carmakers will select one company from the alliance to lead development.

It will also put each company in charge of specific markets: Europe and Russia for Renault; China, the US and Japan for Nissan; and south-east Asia for Mitsubishi. Renault will take the lead on smaller cars and diesel models, while Nissan will focus on larger vehicles and Mitsubishi will front the hybrid development for sport utility vehicles.

In order to get it through the Covid-19 crisis, Renault has agreed a €5bn loan with its banks which would be guaranteed by the French state, but the government has yet to finalise that guarantee, according to people familiar with the matter. To help the sector, the state has also increased subsidies for buyers of electric and hybrid cars and support for research into hydrogen power and self-driving cars.

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