Renault share price dives as carmaker cuts 14,600 jobs
Renault intends to cut almost 15,000 jobs as the French carmaker looks to salvage €2bn (£1.8bn) in costs due to the impact of the pandemic.
The cost-saving package will include shrinking production and closing car plants. About 4,600 of the job cuts will come in France, with another 10,000 made around the world.
The company’s share price slumped almost 8 per cent on Friday as a result.
The carmaker was already under pressure before the coronavirus outbreak hit, posting its first loss in a decade in 2019.
Renault acknowledged that its global ambitions had been unrealistic as it sought to banish the spectre of Carlos Ghosn, its former boss-turned-fugitive, who is wanted on charges of financial misconduct in Tokyo. Mr Ghosn denies the charges.
Renault said in a statement that the cost cuts were necessary because of “the difficulties encountered by the group and the major crisis facing the automotive industry”.
“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.
It now plans to trim its global capacity to 3.3 million vehicles in 2024 from four million now, focusing on its most profitable models and areas such as electric cars while freezing manufacturing expansion in countries including Romania.
“The mindset has completely changed,” Ms Delbos said. “The previous line was volumes and sales and being the first on the podium. We’re not looking to be on top of the world, what we want is a sustainable and profitable company.”
UK car production slump
The announcement came as the Society of Motor Manufacturers and Traders revealed that UK car production had in April fallen to its lowest level since the Second World War, with just 197 models being sold.
Mike Hawes, chief executive of the trade body, said: “With the UK’s car plants mothballed in April, these figures aren’t surprising but they do highlight the tremendous challenge the industry faces, with revenues effectively slashed to zero last month.”
On Thursday, Nissan also announced the closure its Barcelona factory, but stressed that it was committed to keeping its UK plant in Sunderland.