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As the pandemic destroys the already weakened capital of the auto industry, Renault seeks to implement a “survival” plan to cut costs by € 2 billion over three years. EUR and cancel 14 thousand. jobs worldwide, about a third in France.
According to company president Jean-Dominique Senard, the main problem is overcapacity in France, and the Mobez plant is one of the manufacturing companies whose future is being seriously considered.
Not so fast, warns the unions and President Emmanuel Macron. In opposition to the rules on physical distance, thousands of people marched through the streets of the city on Saturday in protest of any attempt to close the factory. Even before J.-D. When Senard announced his plan, Macron ordered Renault to reconsider its strategy to streamline production at its northern plants and consult with unions.
Not surprisingly, J.-D. Senard, who hinted at the closure of a factory near Paris, Shuazi le Rua, tried to ease tensions, believing that the idea of closing the Mobez factory had never shot him.
Renault plant in Flins, France
The closure of the factory during France’s heyday could become a true test of enthusiasm for any manager. But J.-D. Senard will try to do so despite Macron’s tremendous efforts to save the local auto industry and re-channel the pandemic-affected economy. Furthermore, Renault is currently negotiating € 5 billion. Loans in euros from the French state, the largest shareholder of the company.
“To save Renault, the government will have to accept a smaller footprint of its industry in France,” said Jean-Pierre Cornou, a partner at consulting firm SIA Partners, adding that while politicians around the world face similar challenges. French interventionism can only exacerbate what is inevitable. “Jean-Dominque Senard is working hard, but the house is on fire,” he said.
The first step in this seemingly long process begins on Tuesday, when labor representatives, local politicians and leaders will meet at the Ministry of Finance to discuss Mobež’s problems. If history is a good teacher, it will be just one of many such gatherings.
History
France is known for its industrial wars involving business, union and political leaders. Typically, in the French banal scenario, plant closings are accompanied by a lot of noise and a lot of bitterness, costing taxpayers millions of money and giving false hopes that they can revive mass production.
The former Whirlpool Corp. plant, located near the northern city of Amiens, E. Macron’s birthplace, slowly went extinct in nearly two decades, benefiting from millions in government subsidies. It became a focus of tension during the 2017 presidential election campaign.
Arcetor / Mittal and oil giant Total SA have also been politically dissatisfied with the steel plant in Florentine and the now closed refinery in Dunkerque, respectively. In a dispute, Laskhmi Mittal, CEO of ArcelorMittal, was threatened with the nationalization of its French plant, an empty threat that did not prevent the company from continuing to decline.
Individual cases
In the case of Renault, which is fully in line with the French style, Finance Minister Bruno le Maire asked for an evaluation of the company’s strategy by examining “each individual plant, each individual position” and warned that the closings Plants should be the last resort. The automaker’s state-guaranteed loan depends on the outcome of negotiations with the unions, he told RTL radio on Tuesday.
The Mobez plant, which employs about 1,725 people, is not favored by the fact that Macron visited here in 2018 and was promised more jobs and more investment.
Renault faced problems even before the pandemic, in the years of commercial expansion when Carlos Ghosn led the company to form a three-company alliance with Nissan Motor Co. and Mitsubishi Motors Corp. and make it the world’s largest vehicle maker. .
In the wake of the leadership crisis and acute internal conflicts that followed Ghosno’s arrest in 2018, the company gave up its position in world races with rivals like Volkswagen AG and Toyota Motor Corp. for increased production of electric vehicles.
Renault’s efforts to cut costs in the local market will only exacerbate the situation.
Renault’s competitiveness has long weakened, making business rationalization inevitable, said Philippe Houchois, analyst at Jefferies. – Achieving this goal is difficult, especially in times of crisis. The company is rather vague about what exactly has already been decided and what is still being negotiated. ”
French unions demand that the company move more production to the local market.
“Renault may be too big for their needs, but it is the French workers who are asking for the greatest sacrifices,” said Franck Daout, spokesman for the CFDT union.
PSA model
Jean-Dominque Senard promised to sell the plant in Kodan and to move the operations of Shuazi le Rua to the nearby Flins plant. At a time when the situation in Mobež is sparking rage, car production at the Djep and Flizn plants is slated to disappear.
Utilization of the Renault plant in France is only 60 percent, says J.-D. Senard, producing around 655,000 vehicles with a maximum of 1.9 million. capacity.
“We cannot bear this situation for long,” he says.
Clotilda Delbos, interim CEO of Renault, cites rival PSA as an example in an effort to achieve these goals. Peugeot and Citroen, a carmaker led by CEO Carlos Tavares, have undergone a painful shake-up and now enjoy leading positions in the industry in terms of profitability; Additionally, it gained an advantage over Renault by planning a merger with Fiat Chrysler Automobiles NV.
One of the most important aspects was PSA’s decision in 2013 to suspend production at the Olne and Bua car plant, the first closure of the car plant in France in two decades. When the producer made clear his position that his survival was in grave danger, the government relaxed its position on job loss from “unacceptable” to “inevitable”. Mr. Tavares likes to talk about the situation at the time, when PSA was “on the verge of death” and about his harmonious vision of the industry, according to which he remains the strongest. J.-D. Sanard still takes a “gentle approach”; He vows not to waste time negotiating with the unions and hopes to reach an agreement with them. However, its message is very clear.
“Politicians should consider the future of our industry without focusing on short-term goals with an electoral tone,” he said on national television Sunday.
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