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Renault Could Disappear, Warns French Minister


05/23/2020


Renault Could Disappear, Warns French Minister
The French auto giant Renault could disappear if it didn’t get help soon, warned a French minister on Friday. On the very same day, a Japanese news report claimed that Japanese car making giant Nissan was planning to cut about 20,000 jobs – many of which will be in Europe. This was a twin blow for Europe’s car industry as it was put on alert for more job losses.
 
The French and the Japanese auto majors have been working together through an alliance since the last two decades and the companies are set to to announce an update of their strategies next Wednesday.
 
Previous reports had suggested that this new plan was to be a resetting of the relationship between the two countries which had been strained after the arrest and ouster of the Carlos Ghosn in 2018 November, who was instrumental in crafting the Renault-Nissan alliance and had been the chief of both the companies for a long time. He was arrested and ousted over charges of financial irregularities by a complaint filed by Nissan. Ghosn, who jumped bail and escaped from Japan last year, has denied the charges pressed against him.
 
But given the current situation of the global auto industry created by the novel coronavirus pandemic which has slumped demand for cars, the strategy update has taken on greater significance.  
 
The future of Renault was at stake, warned the French finance minister Bruno Le Maire, who is considering a 5 billion euro ($5.5bn) loan for the company to help it tide over the crisis.
 
“Yes, Renault could disappear,” he told Europe 1 radio.
 
Renault should be able to keep as many jobs as possible in France and the company’s French plant in Flins mustn’t close, Le Maire said. he however also said that it was important for the car maker to adapt to the changing situations and be competitive.
 
No comment on the issue was available from Renault.
 
The electric Zoe models of Renault and the Micra car for Nissan are manufactured at the Flins factory situated northwest of Paris. According to Renault’s website, the plant employed around 2,640 people at the end of 2018.
 
Renault has a total of 40 plants and 13 logistics sites in 16 countries.
 
The stark warning for Renault’s existence was compounded by a report published in the Japanese newspaper Kyodo which claimed that Nissan was planning to cut about 20,000 jobs from its global workforce with a major focus on reducing staff in Europe and in the developing markets.
 
However the report also said that the number had not been finalized yet, No comment from Nissan was available.
 
There has been a steady stream of job losses in the car making industry of Europe because of issue of over-capacity, tough and increasing competition and dropping demands. Up to 9,500 jobs were cut at its Audi brand by Germany’s Volkswagen in December.
 
So far, most of the layoffs during the coronavirus crisis have been temporary, however, with companies taking advantage of government-backed furlough schemes.
 
(Source:www.dawn.com)