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Renault agrees deal with unions

The Renault chief executive Carlos Ghosn said the agreement "complied with the rules of collective bargaining."

Story highlights

  • The deal involves a workforce reduction of at least 7,500, comes after nine months of talks
  • Renault CEO Ghosn said the company had "no plan B" if the agreement had not been reached
  • The agreement highlights the importance attached in France to not shutting down factories

Renault has struck what it describes as an "historic agreement" with French unions over its plans to slash its workforce in the country by 15 per cent, including a commitment to lift the number of cars it makes in France.

The deal, which involves a workforce reduction of at least 7,500, comes after nine months of talks between the company's directors and France's often hardline unions, with only the Communist-backed CGT deciding to abstain from backing the accord.

The agreement highlights the importance attached in France to not shutting down factories, with Carlos Ghosn, Renault's chief executive, promising that none of its plants will be closed.

PSA Peugeot Citroën, Renault's domestic rival, has been heavily criticised by President François Hollande and his ministers over its plans to cut more than 10,000 jobs in the country, including the closure of a plant near Paris.

ArcelorMittal, the steelmaker, has also been attacked because of its decision to shut two blast furnaces in Lorraine. Like Renault and Peugeot, Arcelor's closure involved no compulsory redundancies.

However, Renault, which is 15 per cent owned by the French state, has escaped government criticism after its long negotiations and promise to keep all of its assembly lines in operation.

Mr Ghosn said the company had "no plan B" if the agreement had not been reached. It will allow Renault to cut costs by €500m a year and increase the utilisation of its French plants to 85 per cent.

The Renault chief executive said the agreement "complied with the rules of collective bargaining, is just for the workforce and provides solid foundations for the company's sustainable growth".

As well as the job cuts, workers have accepted a salary freeze this year and an increase in the number of hours worked each week.

For its part, the company's management has agreed to increase the number of cars made in France from 530,000 a year to 710,000 by 2016.