Renault Alpine A110 Sportscar 2017 Geneva show

Main Renault unions reject cost-cutting plans

The four major unions representing workers at Renault are opposed to its cost-cutting plans, union sources said, adding to the French automaker’s restructuring troubles.

Loss-making Renault, which is 15% owned by the French government, has outlined 2 billion euros ($2.3 billion) in savings, including through job cuts and reorganizing its plants, to restore profitability.

Worker representatives only have a consultative role in the strategies but declining them would complicate the task for new CEO Luca de Meo.

De Meo, who arrived in July, had called on staff to support him in a recent internal memo, saying: “I need you to carry out this turnaround.”

The CFE-CGC, CFDT, CGT, and Force Ouvriere unions have declined Renault’s plans at a meeting with representatives of the company on Tuesday, four union sources said.

The CFE-CGC union confirmed its opposition to the cuts in a statement, saying it was not convinced by the way the automaker prepared to go about its strategies even if it understood the economic imperatives.

Renault has not commented yet.

The company has like peers been impacted by the coronavirus crisis, which forced it to stop production previously this year while dealerships also closed temporarily.

This exacerbated present problems with profitability, and De Meo wants Renault to produce fewer cars while improving margins. The company prepares to slash 15,000 jobs worldwide in the next three years, including 4,600 in France.

Unions have turned down wide-ranging layoff plans by other automakers in France before, including at Peugeot-maker PSA in 2012. This has not stopped them from going ahead.

But PSA managed to get unions on board for subsequent competitiveness agreements, which consisted of wage freezes.

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