Renault threatens plant closures.
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  1. #1
    1000+ Posts Damien Gardner's Avatar
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    Default Renault threatens plant closures.

    http://www.news.com.au/breaking-news...-1226559683962

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  2. #2
    1000+ Posts gerry freed's Avatar
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    This is just another play in the war between the corporations, unions and government in France. It was the immediate counter blow to Montbourg attempting to ambush Ghosn with a misinterpretation of a phone call. See the thread on Renault having a fun day. Overnight the Renault activists teamed up with the PSA workers losing their jobs at Aulnay and demonstrated in Paris. The government has promised meetings and but can't do very much. The idea of nationalisation of factories threatened with closure is being touted again today. The government can't do it without damaging overseas investor confidence.
    The State still own Renault shares but it being a CAC40 company, the main investor base is foreign investment funds and then there are the cross shareholdings with other car makers elsewhere.
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  3. #3
    Fellow Frogger! Alastair Browne's Avatar
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    Hi Gerry

    We are all grateful to you for keeping an eye on all developments in France. Without you, many of us would be lost in understanding the nuts and bolts of what's going on politically with Renault.

    Keep up the good work

    Alastair

  4. #4
    1000+ Posts gerry freed's Avatar
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    Thanks for the support. Ghosn was at Davos today and was quizzed on CNN about the European crisis. He said it was a risky situation and Renault was in the interesting position of operating out of two countries in economic difficulties. However Renault-Nissan is now global and we are moving our production and direction to the markets with potential and we will support those efforts with manufacturing in existing locations. Asked about the inability of the French govenment to force through the reforms needed, he smiled and very politically said the industry, unions and government have already reached some important agreements.
    Actually, last week they did sign a compromise deal which pretended to give more job security and yet more flexibility for employers.
    This smoke and mirrors is still decades behind Australian industrial law.
    Meanwhile, in Spain where Renault and PSA are developing new facilities, unemployment is 26% and for the 18-24 age group 55%.
    Guess where it is cheaper to operate!
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  5. #5
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    this really isnt going to end well...

    01:14 30Jan13 RTRS-Cutbacks at France's Peugeot and Renault meet growing resistance
    * Auto workers stage protests at planned cuts
    * Peugeot plan suspended by court
    * Renault CEO Ghosn under pressure on pay
    By Gilles Guillaume and Laurence Frost
    PARIS, Jan 29 (Reuters) - Labour tensions at France's car makers took a turn for the worse on Tuesday as Renault <RENA.PA> factory workers protested over planned cuts and PSA Peugeot Citroen's <PEUP.PA> restructuring plan suffered a legal setback.
    While Renault staff demonstrated at the company's Flins plant west of Paris and Peugeot workers marched on the company's Paris headquarters, the car makers pursued union talks on plans to improve productivity and eliminate close to 8,000 jobs each.
    "As things stand now, the conditions are unacceptable," CFDT union chief Laurent Berger said of Renault's proposals for a new nationwide labour deal.
    Peugeot, the car maker worst hit by Europe's deep auto sales slump, is struggling to shed costs and lift sales in its effort to return to profit in 2015. Renault, while cushioned by earnings from its Dacia low-cost cars and a 43.4 percent stake in Japan's Nissan <7201.T>, is also grappling with industrial overcapacity as sales of French-built models plunge.
    The CFDT, France's biggest private-sector union, also increased pressure on Renault boss Carlos Ghosn by echoing calls from within President Francois Hollande's socialist government for a cut to the chief executive's salary.
    "Workers can't be asked to make sacrifices unless the CEO is asked to make sacrifices," Berger said on BFM Television.
    The government, Renault's biggest shareholder with a 15 percent stake, attempted to trim Ghosn's pay at a board meeting in December, Finance Minister Pierre Moscovici said in a Monday radio interview, without giving details.
    Ghosn earned 2.79 million euros ($3.76 million) from Renault in 2011 and 9.92 million from Nissan in its corresponding financial year, making him one of the highest-paid CEOs in France or Japan.
    About 500 workers staged a protest in front of Renault's Flins plant, where production of the Clio has dwindled as more of the sub-compact vehicles are assembled in Turkey.

    COURT ORDER
    Renault is cutting 7,500 jobs over three years without compulsory redundancies and is demanding union concessions on pay, flexibility and working hours in return for guarantees to keep French plants open. [ID:nL6N0AKD06]
    Unions, meanwhile, are demanding firm commitments on production volumes in France as part of any deal.
    Peugeot's plan to close a plant and eliminate 8,000 positions across France faces possible delays after the Paris Appeals Court ordered a temporary halt to the restructuring to allow additional consultations with workers. [ID:nL5N0AY96F]
    At the Peugeot Aulnay plant, earmarked for closure in 2014, production of C3 sub-compacts continued at a trickle amid continuing protests.
    Workers from the plant, which reopened on Monday after a strike and 10-day closure this month, were called upon by the CGT union to march on Peugeot's Paris headquarters.
    Negotiations on the cuts continued on Tuesday, but final implementation must now wait until Peugeot also completes formal talks ordered by the court at two sites belonging to parts division Faurecia <EPED.PA>.
    The CGT union had challenged the plan by arguing that Peugeot had failed to consult workers at two Faurecia sites that would be affected directly.
    "It's a restructuring that has an impact on Faurecia's activities," CGT lawyer Fiodor Rilov said. "As a result, workers' representatives have to be informed and consulted."
    Peugeot shares were down 1 percent at 6.24 euros at 1408 GMT, wiping out a gain of about 1 percent before publication of the court ruling. Renault was up 1.7 percent at 44.75 euros.
    Peugeot insisted that talks on the cutbacks were proceeding normally on Tuesday and will continue for two more scheduled sessions on Feb. 5 and Feb. 12.
    "The negotiations are not suspended and will continue to make progress," a company spokesman said. He gave no new time frame for implementation, which the company had aimed to begin in February or March. ($1 = 0.7429 euros)

  6. #6
    1000+ Posts gerry freed's Avatar
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    The government has a component which is ultra left, created inappropriate promises to get elected and now has little to offer except damage to the automobile companies and to the overall French economy. A lot of this noise is just bluff and crude blackmail. Ghosn could easily take his salary down to a euro within France and that would leave the unions nowhere to go. Already, the Prime Minister has had to squash these notions as the PR effects of losing Ghosn would be totally disproportionate and would not save jobs anyway.

    The PSA situation is much harder to handle, they could be forced to go the way of the UK industry and give up, at least in France. Some extreme players would like to see it nationalised but no sane manager taking over would want to preserve jobs in uneconomic factories and the governement has no real appetite for funding losses; The budget is dependent on debt and they still cannot deliver a restructuring of employment costs in France.
    The Arcelor Mittal battle which is running in parallel with overt threats of unworkable nationalisation has taken a difficult turn for the government as the company has announced that for the same reasons of mismatch of capacity and demand it is moving production to its most efficient units and is closing its Belgian plant. Very hard to fight these industrial economics.
    We saw today demonstrations by workers from PSA, Sanofi and Virgin on the Champs Elysťes in front of the Virgin store which is closing. As with the car industry, the field has been rearranged and selling music and DVDs in high rental outlets makes no sense as the Internet has taken the business. The French workers refuse to accept it and are pretending to be demanding that it be kept open in order to maximise their redundancy terms. Sanofi is doing the same in the drug industry.
    It is not much fun battling in a declining economy and this year is make or break for the Government.
    In the meantime I don't think that I would be buying a car assembled in the Aulnay plant. I doubt that quality control or company image is high on the workers' priorities. Fortunately PSA has a number of more rational assembly plants especially overseas.
    For PSA to continue making cars in France it has to cut the labour costs. This a combination of the worker productivity (and they are going to fight any threat to wages, job security and workload) and the on-costs due to the unfundable social welfare the French have voted for themselves. The government has little political capital to force through the reforms necessary and is lagging behind other European countries restrucuting, further worsening productivity.
    It is trying to divert the public by focusing on other issues - "marriage for all" and pushing terrorists in Mali back up into the hills. The marriage for all argument is going well, taking up a large portion of the media news allocation and bringing out big demonstrations on both sides. Although Spain has had such legislation in place for some while, this has divided France - essentially the Left versus the Catholic Church.
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  7. #7
    Member Gregbathurst's Avatar
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    Car sales in Europe are so poor it is a bad time to have most of your sales there. Sales are the lowest in 20 years, and still headed south. Renault have to expand into Asia and the Americas, they have no choice. The future for PSA looks bleak, unless they can restructure and look to sales in Asia, the govt will have to cut them loose eventually. Trying to compete with the Germans for European sales is a sure way to go out backwards.
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  8. #8
    1000+ Posts gerry freed's Avatar
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    Goodyear Dunlop France announced today the closure of their Amiens factory with the loss of 1,137 jobs. They say that after 5 years of unsettled disputes with the unions they are quitting. The union response is a strike! They were making agricultural tyres and are not interested in car tyres because the French scene is not competitive with the US.
    It is not fair to say that Renault are expanding into Asia and the Americas. What they are doing is positioning themselves aa a global company and investing where their markets are and where the costs to supply those markets are appropriate. To see them as a French company expanding is misleading, to start with they are a Franco-Japanese alliance. We have Renault, the listed French company, with the majority of shareholders being international investment funds plus a government holding and the cross shareholdings with Daimler Benz and Nissan. Then we have the Renault car brand which is badged engineered on certain models for certain markets and practically the same car may appear elsewhere as a Nissan, Lada, Dacia or Samsung. Underlying it all is the shared techology and platforms that put the same components in Mercedes, Nissan,etc for common benefit.
    The vision of the people managing it is completely different to that of a national government. They have social obligations across national borders and to attempt to force them to operate expensively in one jurisdiction just returns costs to the car buyers and increases their cost of capital.The French Government has to lose until it can restructure French productivity to meet world's best practice. Fortunately Renault has adequate funding in capital and debt to drive forward in this global presence. Peugeot was a late starter and stayed too long in an uneconomic environment. They are trying to climb out also by repositioning geographically but also by being more focussed on higher margin sub-segments of their existing markets.
    I am waiting to see the French car market's reaction to the 'no frills' model CitroŽn planned to be made in Spain. It is not being pitched like Dacia as a low cost product, presumably in search of profit margin. While the French unions fight to save indefensible work practices and hence destroy jobs, I can see their members and their compatriots buying the foreign product for its obvious cost/utility.
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    Member Gregbathurst's Avatar
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    The French are very conservative and don't like change, their unions want everything to stay as it has been. When are they going to let go of the 2 hour lunch break! For young people stopping for 2 hrs every day must be infuriating. France has a lovely old world charm, it is great for holidays but they have to choose between being a museum for the rest of the world or joining the 21st century.
    In Australia there was great concern as our manufacturing industry went into decline, but the economy gets stronger and stronger. If you rely on making things, there is always someone else who will make them cheaper and better.
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  10. #10
    1000+ Posts gerry freed's Avatar
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    Default Re: Renault threatens plant closures.

    The two hour lunch break is not the issue. It is the 35 hour week that is enemy of productivity. All our local supemarkets, for example are open from 9 to 20h but to do that the shops employ too many people with a lot of their costs being per person and not per person hour. Fewer and fewer people arre being employed fulltime ie 35 hours. They are on part time limted duration contracts now to get round the barriers to retrenchments and so it goes on..........
    Australia or more to the point Australians have got it right and France is frozen in about 1910.
    France is also stuck with paying pensions out of revenue and borrowings, it hasn't worked out how to do it from savings and investment. Defined inflation corrected benefits are catastrophic in a declining economy and ageing population. All these costs get loaded onto employment costs and ultimately the price of cars.



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  11. #11
    1000+ Posts gerry freed's Avatar
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    Default Re: Renault threatens plant closures.

    Some sense is at last prevailing. Montbourg has said the plan of Renault to improve competitivity is reasonable in the light of the European market situation. This leaves the unions to fight it out alone.

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