PARIS -- Renault said it was launching talks with unions to reorganize plants in France, potentially leading to closures, as it cuts capacity and shrinks its workforce.
The automaker will eliminate about 14,600 jobs worldwide and lower production capacity by almost a fifth in a move to dramatically reduce costs following the downturn that has rocked the global auto industry.
The plan includes the politically delicate task of trimming 4,600 positions in France, or about 10 percent of Renault's total in its home country, through voluntary retirement and retraining, according to a news release on Friday.
More than 10,000 further jobs will be scrapped in the rest of the world, pruning a global workforce of about 180,000 people.
Renault said it will reduce its global production capacity to 3.3. million vehicles in 2024 from 4 million in 2019. Planned capacity increases in Morocco and Romania will be suspended. The company flagged possible adjustments to capacity in Russia.
"We have spent and invested too much and will now come back to our base,” CEO Clotilde Delbos said on a call with analysts. “We are facing reality, not looking to be on top of the world."
The company will turn its focus to profitability and away from the race for volumes at any cost, she said, citing a successful revamp at cross-town rival PSA Group, which makes Peugeot and Citroen brands.
Renault’s poor 2019 results provided a necessary wake up call that shocked employees into changing their mindset and working more closely with Japanese partners, Delbos said.
Under former chairman Carlos Ghosn, Renault had a sales target of 5 million sales annually by 2022, which has since been abandoned.
To achieve savings of more than 2 billion euros ($2.2 billion) over three years, Renault’s plan will cost about 1.2 billion euros to implement. While it “may not be enough” it can be put in place quickly, Delbos said.
The automaker held off on decisions about the future of sites in France amid political furor and union opposition, saying that talks will begin on various scenarios including phasing out car assembly at Flins, where it produces the Renault Zoe and Nissan Micra, and Dieppe, which builds the Alpine A110 sports car.
Some plants such as in Flins, near Paris, could center on recycling activities instead of building cars, Renault said.
The Douai and Maubeuge plants in northern France would become "centers of excellence" for electric vehicles and light commercial vehicles, respectively, the automaker said.
Six sites out of 14 in France, including component factories, will be under review. Unions in France have said they feared the measures could lead four sites to shut.