Renault promises to keep French plants running in exchange for a new pay deal image

Renault said it has offered unions a commitment to avoid closing plants in France in return for new pay deal and working conditions.

Renault management met with unions on Tuesday and proposed setting up two regional production centers to pool back office activities and discussed greater staff mobility. “Management said that in the event of a global agreement on the entirety of the measures proposed … it could commit to no plant closures in France, despite the fact that no real growth is forecast, ” Renault said in a statement.

Faced with a falling sales in Europe, automakers are preparing to diminish production capacity and reduce fixed costs at their remaining plants. Renault, whose main shareholder is the French state with a 15 percent stake, has so far resisted domestic closures.

Renault said in September that having more than 10 manufacturing sites in France was a handicap in terms of fixed costs and proposed setting up “west” and “northeast” production centers in order to group activities including human resources, accounting and general management.

This would lead to “economies of scale through the creation of shared departments”, Renault said, without offering further details.
The automaker also proposed more flexibility in terms of workers switching sites temporarily to match fluctuations in production, adding that this would serve to limit the use of short-time work and avoid redundancies.