Renault’s Plan to Cut Jobs in France Got Better Reception Than PSA

The French government responded better to Renault’s plan to cut 7,500 jobs in the country, compared with PSA Peugeot Citroen.

On Tuesday, January 15th, Renault announced it plans to cut 7,500 jobs in France to b able to match production with the falling demand in Europe. The company added that it hopes about three-quarters of the cuts to be made through normal staff turnover. Wednesday, January 16th, Industry Minister Arnaud Montebourg said that Renault’s decision was acceptable as it did not include plant closures and layoffs.

“It’s better than having to deal with layoffs and drastic plant closures that hit company morale,” Montebourg said.

Renault’s rival PSA Peugeot Citroen was sharply criticized by French President Francois Hollande and Montebourg when it announced it plans to close the Aulnay plant and cut 8,000 jobs in France in 2014. Even if PSA said it didn’t plan to resort to layoffs, the announcement inevitably created shockwaves as it came immediately after the presidential election.

“Renault has delocalized more among suppliers and has created more production sites outside France. This is why PSA has to adapt more vigorously,” said a former industry executive who spoke on condition of anonymity.