Renault is Macron’s problem champion
The troubled carmaker announced a radical
restructuring program.
By ELISA
BRAUN AND JOSHUA POSANER 5/29/20, 6:45 PM CET Updated 5/29/20, 7:23 PM CET
PARIS —
French President Emmanuel Macron is hoping to use national and EU financial
firepower to rescue crucial companies and bolster their roles as champions —
that makes Renault a problem.
The French
carmaker is bleeding red ink and on Friday announced a three-year restructuring
plan, with 4,600 jobs set to go in France alone as part of a global effort to cut
costs by €2 billion.
The
pandemic, which saw Renault's car sales in France fall by 83.8 percent in
April, has only accelerated the carmaker's decline to a struggling brand
buckling under the weight of a costly transition to clean mobility while locked
in a troubled alliance with Japanese automaker Nissan.
"The
kind of [health] crisis we have just come through has forced us to act,"
said Renault's Chairman Jean-Dominique Senard at a press conference announcing
the restructuring plan. He said the coronavirus had simply made the need to
reform "more urgent."
Jobs cuts,
closing factories and angry workers are a problem for Macron.
"Today the company can longer take the weight of
the expenses given the collapse of the market" — Jean-Dominique Senard,
chairman of Renault
The French
government has announced an €8 billion rescue package for the car industry, as
well as a promised state guarantee for a €5 billion loan for Renault — as long
as the carmaker strikes a deal with its unions over factory closures and joins
fellow French carmaker PSA in the Commission-led project to build a European
battery industry for electric cars.
On Friday,
Senard said the company didn't need the cash yet. He was also lukewarm on the
need to invest in battery cell technology. "In batteries we are very well
supplied for the years to come," he said.
Saving
companies like Renault — in which the French state has a 15 percent stake — is
part of Macron's post-pandemic vision of building up national and European
champions able to do battle on global markets. The government gave Air France a
€7 billion bailout, part of which involved assurances that the airline would
continue to buy aircraft from Airbus — another industrial champion.
In comparison
to PSA, which turned a profit and is gearing up to merge with Fiat Chrysler,
Renault is in a much more difficult spot. It posted a €141 million loss last
year, its alliance with Nissan is in tatters, and it needs to slash production.
The restructuring
plan will see Renault cut 15,000 jobs worldwide, and start talks with its
unions over what to do about excess production at some of its 14 French plants.
"Today the company can longer take the weight of the expenses given the
collapse of the market," said Senard.
Renault is
leaving the big decisions until after July 1 when Luca de Meo, the former boss
of Volkswagen unit Seat, takes over as CEO.
"Why
make a rather sad announcement like that of job losses without announcing a
development plan," asked Senator Olivier Jacquin, a French Socialist
senator working on transport. "It's a bit surprising from that point of
view."
Getting the
job cuts out of the way now might clear the decks for new corporate leadership
to set out long-term goals, but it does nothing help Macron steer his
government through a major economic crisis. The prospect of mass redundancies
also exposes him to political pressure.
"When
the government is putting €8 billion on the table, this cannot be done without
putting conditions for the development of an industrial strategy," said
Sébastien Jamuel, a Communist MP for Dieppe in the north of France where
Renault has a plant. "Industrial sovereignty must be regained, but not
only in the world of words, but also actions and demands that the shareholder
state must make."
EasyJet axes almost a third of staff on virus
fallout
Roland
Jackson
Agence
France-Presse
London,
United Kingdom / Thu, May 28, 2020 /
02:15 pm
British
no-frills airline EasyJet said Thursday that it will axe up to 4,500 jobs, or
almost a third of its workforce, as coronavirus ravages demand and grounds
global air travel.
"We
are planning to reduce the size of our fleet and to optimise the network and
our bases. As a result, we anticipate reducing staff numbers by up to 30
percent across the business and we will continue to remove cost and
non-critical expenditure at every level," said Chief Executive Johan Lundgren
in a statement.
The job
cuts will impact up to 4,500 of the carrier's 15,000 staff, a spokesman told
AFP. A consultation process will be launched in the coming days.
The
COVID-19 outbreak has devastated the global aviation sector, with passenger
numbers slumping during lockdown measures as air travel demand evaporates.
EasyJet
follows competitors British Airways, Ryanair and Virgin Atlantic, which have
all slashed staff numbers to save costs.
"We
realise that these are very difficult times and we are having to consider very
difficult decisions which will impact our people, but we want to protect as
many jobs as we can for the long-term," added Lundgren.
"We
remain focused on doing what is right for the company and its long-term health
and success, following the swift action we have taken over the last three
months to meet the challenges of the virus."
EasyJet had
grounded its entire fleet at the end of March, and currently plans to resume to
the skies in mid-June with a limited number of flights.
"Although
we will restart flying on 15 June, we expect demand to build slowly, only
returning to 2019 levels in about three years' time," added Lundgren.
"We
want to ensure that we emerge from the pandemic an even more competitive
business than before, so that EasyJet can thrive in the future."
Travellers
arriving in Britain will meanwhile face 14 days in quarantine from next month
to prevent a second coronavirus outbreak.
The
pandemic has battered the air transport sector by all but grounding planes,
resulting in layoffs, bankruptcies and rescue plans worldwide -- although
Lufthansa is wavering over a nine-billion-euro ($9.9 billion) German state
lifeline.
The
International Air Transport Association (IATA) forecast this week that global
airlines will lose some $314 billion (286 billion euros) in 2020 revenues on
the back of coronavirus.
EasyJet
added Thursday that it would not provide any outlook as a result of the turmoil.
"At
this stage, given the level of continued uncertainty, it is not possible to
provide financial guidance for the remainder of the 2020 financial year.
"However,
as shown in this release, we continue to take every step necessary to reduce
cost, conserve cash burn, enhance liquidity, protect the business and ensure it
is best positioned on our return to flying."
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