PARIS (Bloomberg) -- Renault SA aims to reach an early-retirement deal with unions at the beginning of 2011 to reduce its French work force.
The automaker is meeting labor representatives today at its headquarters in the Paris suburb of Boulogne-Billancourt to start negotiations, spokeswoman Emmanuelle Lacoin said in a telephone interview.
Renault's proposals are designed to “respond to the under-utilization” of some plants, she said, declining to say how many jobs may be cut from its domestic work force of 55,000. “We are hoping to reach an agreement by early next year.”
Renault forecasts a drop in 2011 French production, including a 23 percent decline at a plant in the northern city of Sandouville, as sales in the main European market fall, the company said last week. The Sandouville factory produces the Laguna mid-sized car and Espace large minivan. Renault's plan draws on French labor rules allowing those in tough manual jobs to take early retirement.
Domestic production has fallen in step with declining sales of larger cars assembled exclusively in France, which is one of the few European countries still subsidizing auto sales with scrappage bonuses introduced last year to help weather the crisis. France's bonus, which declined to 500 euros ($677) per car on July 1, expires Dec. 31.
Renault's smaller models such as the Clio subcompact and Twingo minicar are increasingly manufactured for the western European market in Turkey, Slovenia and other lower-wage economies. Renault has said it may transfer future replacements for the Laguna and Espace to its plant in Douai, France, from Sandouville.
The carmaker in September repaid one-third of an emergency 3 billion-euro government crisis loan received last year in return for pledges to avoid job cuts.
The talks with unions will also identify areas, including electric car and battery production, where Renault needs to recruit more skilled workers, Lacoin said. Early retirement is “just one of the measures being considered,” she said.