Renault denies it may close two French plants
PARIS (Bloomberg) -- Renault denied a union leader's claim that it plans to shutter two of its French factories unless it reaches an agreement on increasing productivity, holding back pay and cutting the workforce.
A plant in Flins is most at risk of closing, Dominique Chauvin, head of the CFE-CGC union at the carmaker, said today.
The automaker issued a statement in response saying: "Renault has never said two sites could be closed if no agreement were to be reached in the current negotiations on the performance of French sites." Talks are aimed at finding ways to increase competitiveness, the company said.
The carmaker said earlier today that it's willing to increase production in France by 15 percent once a labor deal is reached.
The French carmaker's domestic factories may build 80,000 more vehicles a year by 2016 to supply manufacturers that the company cooperates with, including Nissan and Daimler, it said.
Renault's current full-year production in France amounts to 530,000 vehicles for its own brand, according to the automaker.
The signing of an agreement will allow our French plants to be sufficiently competitive to attract volumes coming from our partners," Gerard Leclercq, Renault's head of operations in France, said in a statement on Tuesday.
Renault began talks with unions in November as part of efforts to sustain profit while Europe's car market falls to almost a two-decade low.
The automaker's global deliveries fell 6.3 percent to 2.55 million cars and light vehicles last year, led by a 19 percent plunge in Europe. The company forecast on Jan. 18 that industrywide European car sales will drop 3 percent in 2013 in the sixth straight annual contraction.
Renault is asking unions to agree to a wage freeze in France this year and then raises of 0.5 percent in 2014 and 0.75 percent in 2015.
Renault said after talks on Jan. 15 that it wants to eliminate 7,500 jobs through 2016 at French operations, or 17 percent of Renault's workforce in the country. Leclercq said at the time that the measures could be achieved by not replacing people who retire or leave voluntarily, rather than by firings.
The job cuts are intended to produce about 400 million euros in savings, Renault said on Tuesday. Total workers' pay amount for 60 percent of Renault's fixed costs in France, the company said.
The company's proposals come on top of other plans, including a 6.5 percent increase in work hours at the country's plants that would reduce spending by 65 million euros.