Renault begins talks with unions on a new pay deal in France image

Renault initiated negotiations with unions about a new deal on pay and conditions that the carmaker requires in order to improve domestic competitiveness and keep jobs in the country.

Renault has said it wants to align French wage and production costs with plants in Spain and the UK to avoid cuts similar to those announced by rival PSA Peugeot Citroen. Unions have received the news with anger and have vowed to resist.

“Renault is playing workers off against each other when it should be encouraging cooperation, the sharing of resources and know-how,” the company’s main CGT labour group said in a statement. The Renault talks came as the French government unveiled measures to improve France’s industrial competitiveness with 20 billion euros ($25.6 billion) in tax breaks aimed at lowering overall labour costs.

Renault, Peugeot and their suppliers have led French manufacturing companies’ calls for action to reduce employment costs. Peugeot has announced plans to cut 8,000 French jobs, close the Aulnay assembly plant near Paris and shrink another. Renault, which is 15-percent owned by the French government, has so far resisted domestic closures.

Besides a cut to payroll taxes, Renault also wants worker concessions to “enable a sound and permanent foundation for manufacturing, research and development and services to be maintained in France”.