Renault will end carmaking at French plant despite union protests

Renault will convert its factory in Flins, France, into a facility for recycling, retrofitting and research, as the money-losing automaker moves to trim its global production by 20 percent.

The automaker said in a news release that it aims to employ 3,000 people at the revamped site by 2030, including staff from its nearby Choisy-le-Roi reconditioning facility, which has a workforce of 260 but is earmarked for closure.

The move comes despite union opposition and government pressure to keep manufacturing in France.

Renault executives are treading carefully in the automaker's home country due to pressure from President Emmanuel Macron to keep production and research in France in exchange for financial backing from the state to get through the coronavirus pandemic. Macron delayed a 5 billion-euro loan guarantee to the company earlier this year until it had agreed with unions about two northern factories.

The Flins factory outside of Paris opened in 1952. It currently builds the Zoe full-electric car and the Nissan Micra hatchback; both cars are assembled on the same production line and are based on a similar platform.

Renault will continue to build Zoe models at Flins until 2024 and will then consolidate EV output in France at its plant in Douai, where the electric Megane will be made. Zoe sales have surged this year under tougher emissions standards and enhanced government incentives for zero emissions vehicles.

Under a revised strategy for the Renault-Nissan alliance, Renault will take the lead in developing the next generation of Micra for Nissan, although there has been no announcement on a future production site.

Part of the production for the previous generation Renault Clio hatchback was at Flins, but the current Clio is now built entirely outside of France. Employees had feared that Flins would close completely under Renault's latest cost-cutting plan.

Unions said their proposals to keep on some car assembly activities in the longer run had been turned down.

"Flins should continue to produce new cars alongside other activities," CGT union representative Jean-Francois Pibouleau said on Wednesday.

The CFDT union is urging Renault to reconsider cutting jobs at Flins and shifting production to Douai. As many as three quarters of the EVs the automaker sells in its home country will be built elsewhere five years from now, according to the union.

"Renault cannot destroy production capacity in France while at the same time benefit from state support," it said in a statement. "We will not accept it."

"We are facing up to reality," Chairman Jean-Dominique Senard said on Wednesday after meeting with labor representatives at the plant, which has made 20 different models over almost 70 years. "We all know that the status quo is no longer possible. We need to reinvent Flins."

Maintaining EV production in France "is a bet that isn’t won yet," Senard said. Renault will import its no-frills Dacia Spring battery-powered minicar into Europe from China.

Renault did not offer any cost or revenue projections on the Flins plant conversion, but CEO Luca de Meo said in a recent interview with Automotive News Europe that some of the activities could potentially be more profitable than auto production.

"I’m confident that we will be able to match our commitment in terms of employment protection,” he said, “and on top of that, we will do something that probably will make more money than simply assembling cars, as we are doing today.”

Renault this year announced 4,600 job cuts in France as part of a 2 billion euro ($2.38 billion) cost savings plan. The company posted a record first-half loss of 7.3 billion euros ($8.7 billion).

The transformation of the plant, which Renault calls Re-Factory, will involve four broad areas:

• Starting in September 2021, the factory will have the capacity to retrofit and recondition more than 45,000 used vehicles a year, with the aim of cutting the turnaround time for such procedures to six days from 21, to reduce the time the car is off the market. Among the technologies on site will be 3D printers to produce parts that are no longer in stock, for collectors or garages. Renault also envisions a service to replace higher-emissions internal combustion power plants with “less carbon-based technologies.” 
• Another area of activity will focus on EV batteries, including repair of 20,000 packs annually by 2030. The plant will also develop and produce “second life” solutions, such as using older EV batteries as energy storage for nonautomotive applications. Renault will also recycle batteries, including extraction of materials for re-use.
• A third activity will be general recycling, including the installation of a dismantling line in 2024 that can break down 10,000 vehicles a year. Workers will also refurbish certain components for use a spare parts; Renault says such parts are on average 40 percent less expensive than newly manufactured ones.
• The final area of activity will be in retraining and research into the circular economy. This will include a business incubator, a center for industrial processes research and partnerships with universities and other institutions.

Bloomberg and Reuters contributed to this report