Renault presented a plan to resolve the crisis

Renault presented a plan to resolve the crisis

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Reduction of fixed costs by over EUR 2 billion over 3 years will help the Group to restore its competitiveness and ensure the long-term development in the framework of the Alliance.

The goal of this plan is improving the efficiency of activities within the Renault Group due to the simplification of processes, standardization of components for vehicles and optimization of industrial capacities.

All changes will be implemented in the framework of continuous dialogue with the social partners and local authorities.

Following the promise given at the announcement of the annual results, the Renault Group submits its plan for transformation. It provides cost reduction of more than 2 billion euros over three years and lays the Foundation for achieving a new level of competitiveness.

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Difficulties faced by the Group, the global crisis in the automotive industry and the need for environmental changes require the company to accelerate the conversion process.

The preliminary plan is to increase cash flow, it will increase the economic stability of the Group Renault and the level of customer satisfaction. This will be possible thanks to more efficient operations and careful management of resources.

In addition, the preliminary plan will lay the Foundation for long-term development of the Renault Group. In France, the company has determined a number of promising strategic directions: electric cars, commercial transport, and the economy with multi-use products and innovations with high added value. To develop them will be a major regional innovation centres, which will be the engine of recovery Group. In particular, will be reorganized activities in Fline and Guyancourt.

If to return to profitable and sustainable growth the Renault Group will need to undertake some personnel changes, this will be done through an open dialogue with the social partners and local authorities. The plan provides for recharacterization, the increase of internal mobility and resignation. The entire program will take three years and will affect nearly 4,600 jobs in France, will also be reduced by more than 10,000 other positions around the world.

“I am confident that our assets, values and leadership will help to successfully carry out the transformation and to restore the influence and success of the Group. The planned changes are fundamental to the sustainability of the company and its long-term development. Thanks to the collaboration and support of Alliance partners, we will be able to solve their problems and become a key player in the automotive industry in the future. We are fully aware of the responsibility lying on us, transformation can only be realized with observance of interests of all parties and Groups in an open public dialogue,” said Jean-Dominique Senar, Chairman of the Board of Directors of Renault.

“In a complex and uncertain environment, this project is essential, it will provide a sustainable and long-term activities focused on customer satisfaction. We will effectively use our assets, such as experience in the field of electric vehicles, resources and technology of the Renault Group and Alliance, but also optimize development and manufacturing of cars. All this will help us to achieve savings and to restore overall profitability, ensuring future growth in France and around the world. The implementation of this project will help us to look with confidence to the future,” added Clotilde delbos a, acting CEO of Renault.

Key elements of this project are:

• Improving the efficiency and reducing the cost of engineering services by about 800 million euros by attracting resources of the Alliance:

  • Optimization of vehicle development: standardization of components, standardization, program “benchmark-equivalent of” inside the Alliance.
  • Resource optimization: the concentration of strategically important technologies with high added value in the technical centres of the Ile-de-France; improvement of the work of research centers abroad and Contracting processes; improving control systems through digital solutions.

• Optimization of production and, as a result, savings of about 650 million euros:

  • Express the transformation of plant facilities on the basis of the concept of “Industry 4.0”
  • Process improvements in new engineering projects: the accelerated introduction of digital solutions and methodology “design to process”.
  • Adjustment of the scale of industrial capacity:

• Reduction of production capacity in the world with 4 million cars in 2019 to 3.3 million by 2024.

• Change the number of production staff.

• The suspension of the planned projects to expand capacity in Morocco and Romania, the analysis of the adaptation of the production of the Group in our country, the study of the rationalization of the production of gearboxes around the world.

  • In France, four workers on a production optimization will be discussed in detail with all stakeholders, primarily with the social partners and local authorities:

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• Renault launches consultations on the plants in Douai and Maubeuge. Its goal is to explore possibilities to create an optimized innovation centre for electric cars and easy commercial transport in the North of France.

• Open discussion of retooling factory in Dieppe at the end of the production Alpine A110.

• The creation of an ecosystem with multi-use products in Fline, including transferring processes from Choisy-Le-ROI.

• In Fonderie-de-Bretagne Renault launches strategic internal audit.

• Improving the efficiency of support functions, saving about 700 million euros:

  • The total cost of: digital transformation to reduce marketing costs, streamlining the organization and reducing the cost of support functions, etc.

• Reorganization of activities to optimize resources:

Refocusing on main business of the Group due to the change of coverage will apply, in particular:

  • part of an integrated distribution network RRG in Europe.
  • transfer of the Group’s share of Renault in the Chinese Dongfeng Renault Automotive Company (DRAC) Corporation Dongfeng Motor Corporation and the cessation of production and sales of passenger cars with internal combustion engines under the Renault brand in the Chinese market.

These plans will be presented to the representative bodies of employees in accordance with the applicable rules. The estimated cost of this program amounts to about 1.2 billion euros.

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