France’s biggest automobile manufacturer Groupe Renault announced Friday an aggressive plan to cut costs by more than €2 billion ($2.23 billion) over three years and slash 15,000 jobs worldwide, 4,600 of those in France.
The company’s move is huge as April losses from the coronavirus crisis caused an unprecedented 90% drop in the French car market for new vehicles.
In a Friday morning press conference, Groupe Renault Chairman Jean-Dominique Senard and CEO Clotilde Deblos announced plans to rebuild “the sustainable foundations of Renault.” The plans had been presented to Renault’s board Wednesday evening.
“Every decision for saving has been very thoroughly made. We have thought of our employees because we know these decisions could disturb them,” said Senard. “But the kind of crisis we have come forces us to act.”
The company, located in Boulogne-Billancourt in the western suburbs of Paris, employs nearly 180,000 people in 39 countries. They are the ninth-largest company in terms of revenue in The Republic. Figures for 2019 show sales of 3.8 million vehicles in 134 countries worldwide.
“The draft plan to save €2 billion will be implemented over the next three years with the objective a straightforward one: to rebuild the basis of financial performance that is most robust,” said Deblos. She added that the 2022 plan would tackle operational performance, not a strategy; that will “rest on the shoulders” of Groupe Renault’s new CEO, Luca de Meo, who assumes his post on July 1.
“The COVID crisis made the problems the company was having even more serious. The priority is the financial performance to generate enough cash flow to invest in the future,” Deblos said.