Currently reading: Updated: Renault to cut 15,000 jobs as part of major cost cuts
French giant poised to close plants and simplify line-up as part of major initiative to turn around brand and stem losses
James Attwood, digital editor
News
4 mins read
29 May 2020

The Renault Group will slash its fixed costs by more than €2 billion (£1.7b) in the next three years, a move that will lead to the loss of more than 15,000 jobs worldwide.

The French firm recently posted heavy losses and says the "transformation plan" is needed to help it to weather both “the major crisis facing the automotive industry and the urgency of the ecological transition”. Key to the plan will be increasing efficiencies by simplifying processes and reducing components.

The Renault Group’s operations in France will be focused on developing "strategic business areas", including electric and light commercial vehicles, the "circular economy" and new innovations. 

The planned moves will lead to the loss of 4600 jobs in France and more than 10,000 other positions in the rest of the world over the next three years. The firm intends to reduce its fixed costs by 20% by 2024.

Renault: situation was already serious before pandemic

Chairman Jean-Dominique Senard claims the restructuring plan was already proposed before the coronavirus pandemic and the crisis has simply made it "more urgent". 

"Every decision, every measure for saving has been very thoroughly weighed up," Senard said. "We have thought of our employees because we know these decisions affect them. We are doing it because we know these are the right decisions to make.

"The kind of crisis we have just come through forces us to act. The company can no longer take the weight of these expenses because of the collapse of the market."

It comes ahead of the arrival of former Seat boss Luca de Meo as the firm's new chief executive in July. It is understood by Autocar that de Meo is likely to unveil a stategic plan for the firm later this year and also decide on the future of the Alpine brand.

Senard said the renewed Renault-Nissan-Mitsubishi Alliance partnership was key to enabling the savings. He said: "The planned changes are fundamental to ensure the sustainability of the company and its development over the long term. It is collectively and with the support of our Alliance partners that we will be able to achieve our objectives and make Group Renault a major player in the automotive industry in the years ahead."

The Renault Group’s plan includes saving €800 million (£710m) by improving production efficiencies and cutting engineering costs, in part through the adoption of the ‘leader-follower’ model recently announced by the Renault-Nissan-Mitsubishi Alliance. However, it will not engage in badge-engineered shared models. 

That new Alliance agreement will also help the Renault Group to slash vehicle design and development costs and reduce the number of components used through increased levels of standardisation in its models. It said optimising production costs will save the firm €650m (£577m), while administrative costs will be reduced by €700m (£632m).

Renault to focus on profit over volume

As part of the Alliance agreement, each of the three firms will focus on key markets and model lines, with increased use of shared production. However, Senard pulled back on reports suggesting production of Renault's SUVs will shift to Nissan's Sunderland land in the future, claiming nothing had been decided. 

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It will also adopt increasing use of digitalisation in its new engineering projects, and ‘right-size’ industrial capacities with an adjustment of production. That will involve reducing the Renault Group’s global production capacity from four million vehicles to 3.3 million by 2024, focusing on "profit over volume".

It has scrapped plans to expand the capacity of its plans in Morocco and Romania, will look to adapt the use of its plants in Russia – which also include Lada’s operations – and will study rationalising global gearbox manufacturing. 

Renault is consulting on the future of its Douai, Maubeuge and Brittany plants in France, with the plan to create an "optimised' centre of excellence for electric and light commercial vehicles.

It is also looking at the future of several other plants, confirming reports that it will stage an “open reflection” on converting the use of Alpine’s Dieppe plant once production of the A110 ends. However, Autocar understands that the future of the Alpine performance brand itself remains safe for the time being.

Renault has already confirmed plans to withdraw from its Chinese joint-venture operations. It will, however, continue its Formula 1 programme. 

READ MORE

Renault, Nissan and Mitsubishi to increase technology sharing

Nissan announces major cuts, but Sunderland plant safe

French government outlines €8bn car industry rescue package

 

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si73 30 May 2020

Sad news for the workers but

Sad news for the workers but I guess this was inevitable and is likely to be followed by other manufacturers doing similar as all appear to over produce.
Andrew1 29 May 2020

Brexit activists are a very

Brexit activists are a very interesting breed. They are not exactly stupid but not very bright either. They don't bother with details but are capable of twisting absolutely everything to make it look as if Brexit is great and the EU is "doomed".
Our friend Scotty didn't bother to check that JLR clearly said on different occasions that Brexit will lead to job losses and production being moved inside the EU because of the sales they do on the continent. Or that Renault doesn't sell much in the UK and therefore is unlikely to be hit hard by tariffs. But he is more than capable to post-truth the "narrative" however it fits his agenda.
si73 30 May 2020

Andrew1 wrote:

Andrew1 wrote:

Brexit activists are a very interesting breed. They are not exactly stupid but not very bright either. They don't bother with details but are capable of twisting absolutely everything to make it look as if Brexit is great and the EU is "doomed".
Our friend Scotty didn't bother to check that JLR clearly said on different occasions that Brexit will lead to job losses and production being moved inside the EU because of the sales they do on the continent. Or that Renault doesn't sell much in the UK and therefore is unlikely to be hit hard by tariffs. But he is more than capable to post-truth the "narrative" however it fits his agenda.

To be fair you could say that and whilst I don't see the need to bring up Brexit here, Scotty has a point.
Every article with a negative story on car sales, production etc in the UK is followed by responses of blame Brexit, it's all Brexits fault and usually a lot of abuse implying as Scotty said all brexit supporters are stupid racists. This was always countered with Scotty among others saying this is happening everywhere else as well and brexit can not be blamed completely for all UK woes, it's a global issue.
The past few days have shown that covid 19 has put these issues into sharp focus and manufacturers are now, globally, cutting jobs and reducing manufacturing, which if in the UK would be blamed on brexit. Brexit may contribute but it's not the be all and end all, Renault Nissan alliance is showing us this.

sabre 29 May 2020

Where is the lion's share of the cut jobs at Renaul?

at the quqlity control department

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