Renault Denies Rumors it Plans to Close Two French Facilities

Renault denies rumors that it plans to close two French facilities unless it reaches a deal on rising productivity.

“The management warned us: ‘If you don’t sign, two sites could be closed’,” an official of the FO union said.

According to ominique Chauvin, head of the CFE-CGC union at Renault, the automaker plans to close two plants in France, one of them being the facility in Flins. The automaker quickly denied these allegations, saying that the purpose of these talks is only to increase competitiveness.

“Renault has never said two sites could be closed if no agreement were to be reached in the current negotiations on the performance of French sites,” said Renault.

Today, January 23rd, Renault announced that it plans to increase production in its home market by 15% once a labor agreement is reached, which means that plants in France will manufacture with 80,000 more vehicles annually by 2016 to supply manufacturers which cooperate with Renault, such as Daimler and Nissan. The automaker currently manufactures 530,000 vehicles annually for its own brand.

“The signing of an agreement will allow our French plants to be sufficiently competitive to attract volumes coming from our partners,” Gerard Leclercq, Renault’s head of operations in France, said in a statement.

Talks with labor unions began in November 2012, part of Renault’s efforts to keep profit up amid the falling European market to almost a two-decade low level. In 2012 the French automaker’s sales dropped 6.3% to 2.55 million vehicles in Europe. Earlier this month the company said that it plans to eliminate 7,500 jobs in France mainly by not replacing people who leave voluntarily or retire, instead of laying off employees.