By Edwig Ban
The Renault Group announced on Friday the suspension of projects to increase production capacity in Romania and Morocco, as part of a plan to reduce costs globally. According to a press release from the French group, the plan aims to achieve savings of over 2 billion euros over three years and lay the foundations for a new model of competitiveness.
“The difficulties faced by the Group, the major crisis the car industry is going through and the urgency of the ecological transition are imperative that determine the company to accelerate this transformation. This draft plan will strengthen the Group’s ability to adapt by focusing on cash flow generation while keeping the customer at the center of its priorities. It is based on a more efficient approach to operational activities and on rigorous management of resources “, the communiqué reads.
The plan provides, among other measures, the optimization of production, the suspension of planned growth projects in Morocco and Romania, as well as the realization of studies for the adaptation of production capacities in Russia and the rationalization of gearbox manufacturing activities in the world. It is also intended to review the global production capacity from 4 million vehicles in 2019 to 3.3 million by 2024, as well as “adjusting” the number of employees in production.
“Groupe Renault intends to make the necessary adjustments to the workforce to enable a return to profitable and sustainable growth and is committed to ensuring that this is done through an exemplary dialogue with the social partners and local authorities. This project to adjust the workforce is to be based on retraining measures, internal mobility and voluntary departures. It will run for three years and will target almost 4,600 jobs in France, to which is added the reduction of over 10,000 other jobs in the rest of the world, where the Group is present, “the statement said.
The plan also provides for improved efficiency and reduced engineering costs, by streamlining vehicle design and development (reducing component diversity, increasing standardization) and optimizing resources (concentrating the development of high value-added strategic technologies in engineering sites in Ile-de-France). France and optimizing the use of research and development centers abroad and subcontracting).
By Edwig Ban