The global coronavirus pandemic has greatly impacted businesses around the world, especially in manufacturing where mandatory shutdowns were enforced. In terms of the automotive industry it has resulted in absent sales and factories being silent for months, not good when sales were declining before the crisis. Renault has outlined a recovery plan, but it comes with a considerable amount of pain for workers.
The main aim is to reduce the French marque’s fixed costs by some €2 billion (£1.7 billion) within the next three years. Some of the cost saving will come from simplified lineups and more commonality between models. By sharing more parts across Groupe Renault it will benefit from greater economies of scale. This is in addition to leveraging the Renault-Nissan-Mitsubishi Alliance that aims to save €800 million (£710 million) over the next few years. In fact, shared components across the brands could save a further €650 million (£577 million).
However, the heartbreaking news is that potentially up to 14,600 jobs across Renault are at risk, with 4,600 of those coming from France. This is to be implemented over the next three years, but Renault hopes to retrain, move, and ask for voluntary redundancies in a bid to ease the impact of such a drastic alteration to people’s lives.
Clotilde Delbos, interim Chief Executive Officer of Renault said: “In a context of uncertainty and complexity, this project is vital to guarantee a solid and sustainable performance, with customer satisfaction as a priority. By capitalizing on our many assets such as the electric vehicle, by capitalizing on the resources and technologies of Groupe Renault and the Alliance, and by reducing the complexity of development and production of our vehicles, we want to generate economies of scale to restore our overall profitability and ensure our development in France and internationally. This project will enable us to look to the future with confidence.”
Renault also plans to suspend of planned capacity increase projects in Morocco and Romania, For those curious about the fait of the Alpine A110 sports car, a statement reads: 'Open reflection on the reconversion of the Dieppe plant at the end of the production of the Alpine A110’. It would appear that the A110 is safe for now, but how long its intended production run will be is still an unknown.
The economic consequences of a declining market combined with COVID-19 has created something of a perfect storm. Sadly, we wouldn’t expect Renault to be the only manufacturer to be making big changes over the next few years.
Keyword: Renault recovery plan will cut 14,000 jobs