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

Stocks

   

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)

Comments (0)
This discussion is now closed. We welcome comments on our articles for a limited period after their publication.

  • Most Popular
  • Most Shared

Economy

REUTERS SHOWCASE

Pharma Sector

Pharma Sector

In race for bigger margins, drug makers willing to lose the India "advantage".  Full Article 

Jan Dhan Yojna

Jan Dhan Yojna

Modi: Banking for all to end "financial untouchability".  Full Article 

Power Outage

Power Outage

India may face blackouts as coal shortage cuts power output  Full Article 

Moody's on Inflation

Moody's on Inflation

Persistent inflation hurting India's sovereign ratings - Moody's  Full Article 

Tracking Monsoon

Tracking Monsoon

Monsoon forecast to be better for crops next week  Full Article 

Carmichael Project

Carmichael Project

Adani buys Australia coal mine royalty rights from Linc for $145 million  Full Article 

GDP Preview

GDP Preview

Economy likely grew faster in June quarter: Reuters poll.  Full Article 

India-Japan Meet

India-Japan Meet

Modi eyes breakthrough nuclear pact on Japan trip   Full Article 

Rare Earth Output

Rare Earth Output

India to chip in with 5 pct of global rare earth output  Full Article 

Reuters India Mobile

Reuters India Mobile

Get the latest news on the go. Visit Reuters India on your mobile device.  Full Coverage