Renault Weighs French Factory Closures To Cope With Crisis
Renault Weighs French Factory Closures To Cope With Crisis
(Bloomberg) --
Carmaker Renault SA is looking at closing factories in France as part of a restructuring to help it get through the coronavirus crisis, according to people familiar with the matter.
Dieppe and Les Fonderies de Bretagne may close, said one of the people. Flins near Paris -- Renault’s largest French factory that has made vehicles since 1952 -- could be repurposed to produce other goods such as prototypes, said the people, who asked not to be identified as the deliberations are still private.
Other sites will also be affected by the reorganization, they said. Further details will come when Renault announces a new strategic plan after Japanese partner Nissan Motor Co. unveils a restructuring of its own alongside results on May 28, one of the people added.
Announcements of layoffs and factory closures in France often spark a political backlash, but the government has indicated it may take a more understanding approach this time given the scale of the crisis.
Car sales have collapsed as governments curb non-essential travel to contain the virus. Even before the pandemic forced Renault to halt production, it was struggling with weak profitability. The company said in February it was preparing to cut costs by 2 billion euros ($2.2 billion).
Labor Minister Muriel Penicaud told TV channel Cnews on Wednesday that the industry has to “face up to reality,” while cautioning that the state will be “very mindful of social dialog if there is any restructuring” at Renault. The French state is Renault’s biggest shareholder with a 15% stake.
The French closure plans were first reported by the weekly Canard Enchaine, which said as many as four factories are at risk -- Flins, Dieppe, Les Fonderies de Bretagne and Choisy-le-Roi.
The overhaul could also affect Renault’s presence beyond France. After scaling back its limited presence in China, it’s now considering further moves to reduce its international footprint, one of the people said.
Spokespeople for Renault declined to comment. A spokesman for the French finance ministry declined to comment.
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