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).

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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. 

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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Comments
13

29 May 2020

15000 Jobs to go at the French manufacturer who has no production facilities in the UK? Bloody Brexit.

Fat lot of good being in the EU did to secure those jobs.

Just saying like because that's rubbished another arguement the remoaners used.

29 May 2020

Yes, never mind the global pandemic that has cost the british automotive sector an estimate £12.5billion. Or that sales volume for the whole Renault Group over March and April combined being less that 90% of the Sales of January. Having large fixed overheads and no income means large losses, and large losses lead to job losses

Its people like you with no grasp of simple economics that give Brexiteers such a bad name.

29 May 2020
Erebus wrote:

Yes, never mind the global pandemic that has cost the british automotive sector an estimate £12.5billion. Or that sales volume for the whole Renault Group over March and April combined being less that 90% of the Sales of January. Having large fixed overheads and no income means large losses, and large losses lead to job losses

Its people like you with no grasp of simple economics that give Brexiteers such a bad name.

The point is if this was a JLR article Remoaners first words would be brexit followed by insults

29 May 2020
Erebus wrote:

Yes, never mind the global pandemic that has cost the british automotive sector an estimate £12.5billion. Or that sales volume for the whole Renault Group over March and April combined being less that 90% of the Sales of January. Having large fixed overheads and no income means large losses, and large losses lead to job losses

Its people like you with no grasp of simple economics that give Brexiteers such a bad name.

just one correction - global panicdemic

29 May 2020
Erebus wrote:

Yes, never mind the global pandemic that has cost the british automotive sector an estimate £12.5billion. Or that sales volume for the whole Renault Group over March and April combined being less that 90% of the Sales of January. Having large fixed overheads and no income means large losses, and large losses lead to job losses

Its people like you with no grasp of simple economics that give Brexiteers such a bad name.

This is EXACTLY where the problem lies. You mention the British Automotive sector...  If you check all of my responses you will find that as a Brexiteer, I'm one of the few who consistantly looked at the global view - ironically it was the remoaners who only concentrated on UK.

And if you do look at my history, you will note that any time I mentioned global economics, that was used as some weedy excuse! Seems you can't win whatever you say.

Give it a rest? No.  I'll keep on reminding those who, well I'm not going to say told lies because nobody knows what the future holds, but I will say those who wore blinkers and labelled every Brexiteer in the same class as racists. No we're not racist, or farage supports or union jack waving lunatics - some of us came to our conclusions with an open mind.

So I'll say it again - where have all the remoaners gone? How does this news stand up to the arguments they put forward? And why no comment from the Mike Hawes of this world because if you listened to that mob, redundancies, poor sales and lack of investment etc is only applicable to the UK.

And if you think Nissan and Renault's problems are down to a global panedemic, then clearly you have no idea of economics. All Covid19 did was highlight the problems that's existed for years.

29 May 2020
scotty5 wrote:

15000 Jobs to go at the French manufacturer who has no production facilities in the UK? Bloody Brexit.

Fat lot of good being in the EU did to secure those jobs.

Just saying like because that's rubbished another arguement the remoaners used.

Not great with facts as per usual. Renault is a global company with production sites in South America , Asia, N Africa as well as Europe. The EU can't help save jobs on a global basis. There has been the high cost of the Nissan integration and general falling sales.  The EU has already approved a €5bn French state bailout . Not sure where you've been the last few months but you may have heard of a virus that has stopped people working & buying . 

29 May 2020
Bolida wrote:

scotty5 wrote:

15000 Jobs to go at the French manufacturer who has no production facilities in the UK? Bloody Brexit.

Fat lot of good being in the EU did to secure those jobs.

Just saying like because that's rubbished another arguement the remoaners used.

Not great with facts as per usual. Renault is a global company with production sites in South America , Asia, N Africa as well as Europe. The EU can't help save jobs on a global basis.

Barcelona is closing - Fact. Barcelona in Spain. Fact. Sapin is in the EU - fact. As reported in the article, a high percentage of those redundancies will be in France which is also part of the EU - fact.

Some people simply cannot accept remoaners argument for remaining in the EU would save jobs has proved to be wrong. Fact. ( It'll become even more of a fact if as reported, Renault decide to move production to the UK !!! ).

You also mention countries such as Asia and South America. ( it's also being reported their Romanian plant is to receive no more investment ).  Here's another FACT...  how many times hae we read on these comments that manufacturers are moving production to such markets because of reduced costs and lower wages?  Renaults decision appears to throw a spanner in to the works of that argument too.

29 May 2020
Covid 19 is totally to blame for Renault's announcement of 15,000 workers loosing their jobs. This is extremely upsetting news for the families of those workers, not to mention the 000's of other industries whose leaders are making tough,tough decisions right now in my opinion. This Renault news has nothing to do with Brexit.

29 May 2020
Just Saying wrote:

Covid 19 is totally to blame for Renault's announcement of 15,000 workers loosing their jobs. This is extremely upsetting news for the families of those workers, not to mention the 000's of other industries whose leaders are making tough,tough decisions right now in my opinion. This Renault news has nothing to do with Brexit.

The CEO says in the article, the cuts werenecessary before Covid-19 - Covid-19 only made them more urgent.

29 May 2020

at the quqlity control department

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