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Renault to axe almost 15,000 jobs

Pendulum shift: Renault has announced sweeping plans to help promote long-term growth.

Renault set to streamline processes, cut production in three-year plan to save €2b

1 Jun 2020

ONE week after the French government’s finance minister Bruno Le Maire declared that Renault could be in dire straits without securing financial assistance, the car-maker has announced it is implementing major cost-cutting measures over the next three years that will see almost 15,000 jobs disappear worldwide.
 
Renault’s new strategy sets out to reduce fixed costs by €2 billion ($A3.31b) over this period, beginning with the retrenchment of 14,600 employees from its global workforce – 4600 in France, and the remainder outside its domestic market.
 
Detailing the plan just days after announcing sweeping reform for the Nissan, Renault and Mitsubishi Alliance, Renault chairman (and chairman of the Alliance Operating Board) Jean-Dominique Senard said the company will focus heavily on reducing engineering costs while streamlining vehicle development and component diversity by relying more on its alliance partners.
 
Part of this will come under the newly devised “leader-follower” model when creating a new vehicle, where one of the alliance brands takes the lead on design and development and the other two piggyback off the original design.
 
Along with the optimisation of resources, these measures are predicted to save Renault approximately €800 million ($A1.324b).
 
Renault also plans to reduce its global production capacity from four million units in 2019, down to 3.3 million by 2024.
 
This will see a rationalisation of gearbox production, a reduction of production capacity in Russia and the suspension of plans to expand production in Morocco and Romania.
 
It will also see Renault give up its stake in Dongfeng Renault Automotive Company, resulting in the cessation of sales of Renault-branded combustion-engined passenger cars in the Chinese market.
 
In France, the company plans to create an optimised centre of excellence for electric vehicles and light commercials, and reconvert the Dieppe plant which currently builds the Alpine A110.
 
Renault hopes these processes will result in savings of €650m ($A1.07b).
 
The car-maker also intends to curb marketing and other costs by implementing greater digitalisation and reducing costs related to support functions, which is predicted to save €700m ($A1.158b).
 
Renault has estimated that implementing its strategy will cost around €1.2b ($A1.99b) over the course of four years.
 
“I have confidence in our assets, our values and in the management of the company to succeed with the envisaged transformation and to return our group to its full value by deploying this plan,” Mr Senard 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 Groupe Renault a major player in the automotive industry in the years ahead.”
 
Renault’s announcement comes hot on the heels of Nissan’s latest strategy, which includes cutting production output over the next four years by 20 per cent and reducing its model range from 69 models to fewer than 55 over the period. 
 
Nissan plans to shed fixed costs by around ¥300 billion ($A4.21b), and announced in mid-2019 it would shed 12,500 jobs from its global workforce.
 
Reports surfaced last week that it was also looking at axing another 20,000 global jobs.

 


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