(May 28): Michelin and Renault SA are planning additional cost cuts in France just days after President Emmanuel Macron touted the country’s capacity to win new auto-industry investments.
Michelin is considering eliminating 1,500 positions in France over three years, or 9% of its workforce in the country, the maker of tyres said on Thursday. It cited a “highly unstable economic environment” and the burden of French taxes. Renault said it is talking to unions about shutting down a van development facility near Paris.
As Macron nears the end of his two-term mandate, scrutiny is mounting on the president’s industrial strategy, with France’s taxes as well as high labour and energy costs among the top grievances for entrepreneurs. The president on Tuesday announced more than EUR1 billion (US$1.2 billion or $1.5 billion) in Stellantis NV electric-vehicle (EV) investments in the country — spending the automaker has not yet confirmed.
Both Michelin and Renault, and many of their peers in Germany and Italy, are grappling with muted demand in the European auto industry and mounting competition from lower-cost Asian rivals. Michelin chief executive officer Florent Menegaux told Bloomberg last year that France was destroying its industrial base with over-taxation.
Michelin’s latest cuts won’t involve forced terminations, the company said. The manufacturer has already closed two plants in France as well as others in Europe.
Renault said it met unions to discuss closing the Villiers-Saint-Frédéric site that focuses on light commercial vehicle engineering. Most of its 400 employees will be transferred to the group’s sprawling Technocentre complex near Paris, a company spokesperson said by phone. Some of those jobs will be moved to other Renault premises in the country, with no lay-offs planned.
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Carmakers such as Renault are under pressure to comply with tightening European Union emissions rules and counter competition from Chinese brands led by BYD Co. Renault CEO François Provost has deepened a cost-cutting push that is also targeting the group’s engineering base.
Stellantis, which owns French brands such as Peugeot and Citroën, has been striking a series of deals with partners from China to share some of its European factories, including one in Rennes, northwest France. The move could have wide-ranging repercussions for local engineers, factory workers and suppliers.
For now, Macron is focusing on new investments. The Stellantis spending he announced on Tuesday is for a plant in eastern France, where production of a new generation of EVs is supposed to start in 2029. The automaker has said it will give details of the plan as soon as possible.
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