To save the automaker Renault chooses the route of layoffs. The post Coronavirus project has been defined “viable »by Director General Clotilde Delbos, but provides for the elimination of around 15,000 jobs worldwide. In France, however, 4,600 will be made redundant, as part of a savings plan of around € 2 billion over three years.
The company plans to cut its global production capacity to 3.3 million vehicles in 2024 from 4 million today, focusing on areas such as small vans or electric cars. To reduce costs, it intends to reduce the number of subcontractors, decreasing the number of components it uses, freezing expansion plans in Romania and Morocco and reducing the production of gearboxes worldwide.
The company’s problems come from afar and its difficult financial situation – last year the company closed for the first time with the balance sheet in red – was already known. Economy Minister Bruno Le Maire admitted it on May 22, who clearly stated that “survival is at stake for Renault”. “I have never hidden the seriousness of the current crisis and I do not hide the seriousness of Renault’s situation,” added Le Maire.
On Thursday 28 May, Renault’s strategic partner, Nissan, unveiled huge job cuts, around 20,000 in all. The Japanese automaker has revealed that it has suffered an annual loss of 671 billion yen (approximately 5.6 billion euros). This is the first time in 11 years that the company has reported a loss: several factors have contributed to the crisis, from the fall in demand in China, to the transition to low-emission vehicles passing through Brexit and the Coronavirus epidemic . Among the plants that will close is also that of Barcelona, which employs around 2,800 people.
In China, the automotive industry is focusing on electricity to get out of the crisis
The Renault case is symptomatic of a sector in great difficulty. In March, the director general of the European Automobile Manufacturers Association (Acea), Eric-Mark Huitema, estimated that around 14 million jobs in Europe were at risk with the pandemic. There is talk of a drop in sales of around 50%, which is expected to drop to 30% after the summer. Accomplice not only the climate of economic and labor uncertainty but also the restrictions on movement introduced with the lockdown, as the Hertz case testifies.
Investments in electricity could be a way out of the quagmire. China is moving in this direction: the city of Guangzhou has announced a subsidy of 10,000 RMB for electric vehicles sold between March and the end of December.
In addition, a state-level subsidy for vehicles that use new forms of energy has been extended until 2022 and new infrastructure investments have been planned with the aim of building 78,000 charging stations for a cost of 2.7 billion RMB in the 2020. The first results are already visible: auto sales are starting to recover.
While 250,000 units were sold in February, March numbers were four times higher. Meanwhile, Volkswagen has also announced that it will invest approximately two billion euros in two Chinese companies in the electric car sector, the “largest market in the world” according to the German company.
Article being updated