Renault Cost Cuts Set Back by Few French Staff Agreeing to Leave

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Renault SA is struggling to meet a target to shrink its workforce in France -- a key part of the carmaker’s cost-cutting plan -- as few employees sign up for a voluntary redundancy program.

Only about 300 people have agreed to leave the company under the program started last year, far fewer than a goal of 1,900 staff, according to Guillaume Ribeyre, a representative of the CFE-CGC labor union. Renault started offering incentives for workers to exit in December and they have until September to accept.

A Renault spokesman declined to comment.

Renault’s difficulties trimming its payroll are among a litany of challenges facing Chief Executive Officer Luca de Meo. The pandemic sent car sales plunging in Europe, its biggest market, leading to a record annual loss. The company unveiled a sweeping plan in May to cut 14,600 positions worldwide.

The plan calls for a total of 4,600 positions to be eliminated in France through the voluntary program negotiated with unions, plus early retirement and natural attrition. Deputy CEO Clotilde Delbos last month said Renault was “progressing well” on the plan but declined to give details.

Renault employees’ reluctance to leave reflects anxiety about job prospects in the midst of a global health and economic crisis. Some 16,000 French auto jobs were lost last year, with the total expected to reach 60,000 over three to five years, according to La Platforme Automobile, the country’s auto lobby.

The French state is Renault’s most powerful shareholder, making job cuts tricky. The company has benefited from a government-supported job furlough program, a rescue package for the industry and a 5 billion-euro ($6 billion) state-backed loan.

Last month, Renault warned investors that 2021 will be another challenging year due to Covid-19 and the shortage of semiconductors hampering global car production. In a surprise move to lower debt, Renault last week sold its entire 1.5% holding in Daimler AG.

©2021 Bloomberg L.P.

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