Renault is slashing its workforce, other carmakers may follow

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May 30, 2020

FRANKFURT: About 8 million people around the world earn their living making cars and trucks. It’s becoming clearer that not all of them will come out of the pandemic with jobs.
French carmaker Renault announced an emergency cost cutting plan Friday that is likely to serve as a grim template for an industry that was in deep trouble even before the coronavirus brought sales nearly to a standstill.
Renault said it would cut nearly 15,000 jobs worldwide, or about 8% of its workforce, and pull out of China. The company also vowed a drastic reduction in production as it tries to deal with “the major crisis facing the automotive industry.”
Renault has been hit hard by the pandemic. Its sales in the European Union, the company’s most important market, fell almost 80% in April, when dealerships were closed and most buyers were not leaving their homes.
“It’s not just Renault,” said Peter Wells, director of the Center for Automotive Industry Research at Cardiff University in Wales. “There are too many factories, too many models, too many dealers. A crisis like this is ruthless in exposing the vulnerabilities of these companies.”
Nissan, Renault’s partner in a global automaking alliance, said Thursday that it would close factories in Indonesia and Spain as it reduces the number of cars it produces by a fifth. The announcement came after Nissan reported a loss for the fiscal year ending in March of 671 billion yen ($6.3 billion).
Volvo Cars said last month that it would cut 1,300 white-collar jobs in Sweden, its base. Other carmakers, such as Fiat Chrysler and PSA, which makes Peugeot, Citroën and Opel vehicles, will be under pressure to make similar cuts.
American carmakers cut thousands of jobs last year and have not announced new rounds of layoffs caused by the pandemic. Recently they have been gearing up production after factories were closed to prevent spread of the coronavirus.
Starting Monday, General Motors plans to have three SUV plants running two shifts per day instead of one, while three truck plants will go from two shifts to three. The increase is a response to reports from dealers that supplies of certain models are running thin.
Toyota, Honda, BMW and other foreign automakers have also restarted plants in the U.S. Both GM and Fiat Chrysler have begun restarting production in Mexico this week.
The unrest has already begun to manifest itself in Europe.
In Barcelona, Spain, some of the 3,000 workers who will lose their jobs at the Nissan facility burned tires outside the factory and marched in protest.
Workers at a Renault plant in Maubeuge, in northern France, walked out immediately after the job cuts were announced Friday morning. The automaker is considering merging the plant in Maubeuge, where over 2,000 people work, with a nearby plant in Douai to produce electric cars and light commercial vehicles.

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