We thought too big, Renault says as it axes 15,000 jobs in cost-cutting reboot
By Trend
Renault acknowledged that its global ambitions had been unrealistic, announcing plans to cut about 15,000 jobs, shrink production and restructure French plants as it pressed the reset button and sought to banish the spectre of Carlos Ghosn, Trend reports citing Reuters.
Faced with a slump in demand that has been exacerbated by the coronavirus pandemic, the French carmaker detailed plans on Friday to find 2 billion euros ($2.22 billion) in savings over the next three years.
“We thought too big in terms of sales,” said interim Chief Executive Clotilde Delbos, adding the company was “coming back to its bases” after investing and spending too much in recent years.
Renault was under pressure even before COVID-19 hit, posting its
first loss in a decade in 2019, and has said nothing would be
“taboo” as it reviews its business.
It plans to trim its global capacity to 3.3 million vehicles in
2024 from 4 million now, focusing on its most profitable models and
areas such as electric cars while freezing manufacturing expansion
in countries like Romania.
Renault, like its Japanese alliance partner Nissan, is rowing back on an aggressive expansion plan pursued by Ghosn, its former boss-turned-fugitive, who is wanted on charges of financial misconduct in Tokyo. Ghosn denies the charges.
“The mindset has completely changed. The previous line was volumes and sales and being the first on the podium,” Delbos said. “We’re not looking to be on top of the world, what we want is a sustainable and profitable company.”
The company, due to bring ex-Volkswagen (VOWG_p.DE) executive
Luca de Meo on board as CEO in July, said it would cut costs by
reducing the number of subcontractors in areas such as engineering
and the number of components it uses, as well as shrinking gearbox
manufacturing worldwide.
Delbos ruled out the need for a rights issue, saying Renault was
close to sealing a 5 billion-euro credit line guaranteed by the
French government.
Renault shares were down 5.3 percent by 1223 GMT, the worst-performing stock on France’s blue-chip index.
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