Renault's French job cutting plan gets better reception than PSA

PARIS Thu Jan 17, 2013 1:32am IST

The logo of French car manufacturer Renault is seen during the presentation of the company's annual results for 2007 at the French manufacturer's Boulogne-Billancourt headquarters, near Paris, February 14, 2008. REUTERS/Vincent Kessler

The logo of French car manufacturer Renault is seen during the presentation of the company's annual results for 2007 at the French manufacturer's Boulogne-Billancourt headquarters, near Paris, February 14, 2008.

Credit: Reuters/Vincent Kessler

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PARIS (Reuters) - Car maker Renault's (RENA.PA) plan to cut 7,500 jobs in France to boost the competitiveness of its plants has had a better reception from the government than a similar move by rival PSA Peugeot Citroen (PEUP.PA) six months ago.

Industry Minister Arnaud Montebourg said on Wednesday Renault's move to adapt production amid a shrinking market was acceptable because it did not include layoffs or plant closures.

Renault said on Tuesday it was aiming to cut 7,500 jobs on its home patch by 2016 to boost competitiveness as the slump in its domestic and other European markets shows no sign of easing.

The company, 15 percent-owned by the government, hopes about three-quarters of the cuts will be achieved through normal staff turnover, a Renault spokeswoman said on Tuesday following the latest in a series of meetings with unions.

"It's better than having to deal with layoffs and drastic plant closures that hit company morale," Montebourg said.

Last year French President Francois Hollande and Montebourg sharply criticized PSA's plant to cut 8,000 jobs in France and close a plant in Aulnay-sous-Bois, near Paris, in 2014.

Although PSA had said it did not plan to resort to layoffs, its restructuring drive created shockwaves among government and public opinion because it was announced right after the presidential election.

Renault employs 54,000 people in France, while PSA has around 80,000 staff.

"Renault has delocalized more among suppliers and has created more production sites outside France. This is why PSA has to adapt more vigorously," said a former industry executive who spoke on condition of anonymity.

Automakers across Europe are having to cut costs and capacity to try to turn a profit while the euro zone debt crisis and resulting government austerity measures sap consumer demand. Car sales in France, Spain and Italy fell to their lowest levels in years in 2012.

Renault is pushing workers to accept a new nationwide deal on pay and conditions to cut costs and align productivity with cheaper European sites such as its Palencia plant in Spain and alliance partner Nissan's Sunderland factory in England.

(Reporting by Gilles Guillaume and Julien Ponthus; Writing by Elena Berton; Editing by Mark Potter)

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