Renault SA (RNSDF.PK), Wednesday signed a deal with French labor unions, agreeing to maintain its workforce and sharply enhance production. The auto maker has bargained for additional working hours and unchanged salaries for at least a year, as it steps up efforts to boost growth.
The deal comes as the European crisis continues to dent vehicle sales, forcing a host of automakers to reduce capacity, often leading to acerbic negotiations with labor unions.
It is also being seen as win-win situation for both Renault Chairman Carlos Ghosn and representatives of France's CFDT, CFE-CGC and FO unions, coming as it does after months of protracted talks.
As per the terms with the unions, Renault has committed to producing at least 710,000 vehicles in France by 2016, much higher than 530,000 vehicles in 2012.
The ramped up production will take the utilization rate of the French facilities to more than 85 percent and permits activity of its sites until 2016, and even up to 2020, the company said.
The company will not resort to job cuts, but will adjust its workforce by not replacing 7,500 positions between now and 2016.
Taking on labor productivity, an area where France has fared none too impressively, Renault said position working time will be 35 hours per work on average over the year (i.e. 1,603 hours per year at all Renault sites in France). This will generate 5-10 days of time in lieu per year at its sites.
Renault will maintain wages in 2013 at the same level as in the prior year, while agreeing to review it for the next two years.
The company will also organize the operation of the manufacturing sites into two regional hubs, and blend the support functions not directly related to the everyday manufacturing business within the hubs.
In Paris, Renault stock closed Wednesday at 53.52 euros, down 1.27 percent.
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June 05, 2026 16:18 ET A busy week for economic news flow saw a slew of reports being released that reflected the trends in the U.S. labor market. In Europe, economic growth and inflation data gained attention as the European Central Bank and Bank of England head for policy session later in the month. In Asia, the monetary policy session of the Indian central bank was in focus as the country, a major oil importer, reels under the pressures of a weaker rupee and rising inflation.