Groupe Renault plans to reduce its fixed costs by more than two billion euros over the next three years, thereby increasing its competitiveness and strengthening long-term development as part of the Renault-Nissan-Mitsubishi Alliance. The plan aims to make the activities more efficient. To this end, processes are to be simplified, the variety of components in vehicles reduced and industrial capacities adjusted. The planned measures are implemented in coordination and in close dialogue with the social partners and the local authorities.
The plan is presented today as announced in the presentation of the annual results. With the project, the Renault Groupe wants to lay the foundations for its long-term development. The company is to be set up in France around the strategic business areas of electric vehicles, light commercial vehicles, circular economy and innovations with high added value. These large, regional centers of excellence in France are to be at the heart of resuscitation. Activities are to be reorganized at the Flins plant and the engineering and development center in Guyancourt.
In the event of necessary personnel adjustments as the basis for the return to profitable and sustainable growth, these should be implemented in close dialogue with the social partners and the respective local authorities. They are to be achieved through retraining measures, internal mobility and voluntary leaving the company. The restructuring would take three years and affect almost 4,600 jobs in France, plus the cut of more than 10,000 additional jobs in the rest of the world.
“I have confidence in our strengths, our values and in the management of the company in order to successfully implement the planned transformation and to bring the company back to its full value. The planned changes are crucial to ensure the sustainability of the company and its development in the long term. Together and with the support of our alliance partners, we will achieve our goals and, over the coming years, we can establish Groupe Renault as a key player in the automotive industry, we are fully aware of our responsibilities, and the planned reorganization can only be achieved with respect for all stakeholders of our group and through an exemplary social dialogue”, said Renault chairman Jean-Dominique Senard.
“In a context of uncertainty and complexity, this project is necessary to achieve solid and sustainable performance. Customer satisfaction is a priority. By using our numerous advantages such as the electric vehicle, the resources and technologies of Groupe Renault and Allianz and reduce the complexity of the development and production of our vehicles, we want to achieve economies of scale and thus improve our profitability and secure our development in France and internationally. With this plan, we can look ahead with confidence,” said Clotilde Delbos, Interim CEO of Groupe Renault.
The project focuses on the following:
Reduction of engineering costs by around 800 million euros
Streamlining vehicle design and development: Reduction of component diversity, increased standardization, leader-follower principle of the alliance Renault-Nissan-Mitsubishi.
Resource optimization: concentrating the development of strategic technologies with high added value at the engineering sites of Ile-de-France; improved use of R&D centers abroad; increased use of digital tools.
Reduction of production costs by 650 million euros
Increased use of Industry 4.0 in the plants.
Process improvement in new engineering projects: faster digitization and”design to process”.
Adjustment of industrial capacities:
Reduction of global production capacity from four million vehicles in 2019 to 3.3 million by 2024.
Adjustment of the number of employees in production.
Suspension of planned projects for new production capacities in Morocco and Romania, investigation of an adjustment of the group’s production capacities in Russia, investigation of possibilities for rationalizing the transmission production.
In France, four working hypotheses on production adjustment will be the subject of in-depth consultations with everyone involved, particularly the social partners and local authorities:
Renault is starting a project at the Douai and Maubeuge plants to study the creation of a center of excellence for electric vehicles and light commercial vehicles in northern France.
Open view of a conversion of the Dieppe plant at the end of production of the Alpine A110.
Creation of a circular economy ecosystem at the Flins site, including relocation of Choisy-le-Roi’s activities.
Strategic survey of the foundry in Brittany.
Increased efficiency in support functions; about 700 million euros
Optimization of general costs and marketing costs: stronger digitization, rationalization of the organization and cost reduction in connection with support functions.
Adjusting activities for better resource distribution and focusing on the core business
Part of RRG’s integrated distribution network in Europe.
The transfer of Groupe Renault’s stake in Dongfeng Renault Automotive Company Ltd (DRAC) in China to Dongfeng Motor Corporation and the cessation of Renault combustion engine activities in the Chinese market.
These plans are presented to employee representatives in accordance with applicable regulations.
The estimated cost to implement this plan is on the order of EUR 1.2 billion.