Renault to shift Clio production, say unions

FRENCH CAR manufacturer Renault plans to build more than 70 per cent of its Clio subcompacts in Turkey, union sources said, in a shift abroad that could inflame tensions with workers and the government, its biggest shareholder.

During internal presentations, Renault disclosed plans to source less than 30 per cent of the new Clio model from France, according to two union officials who declined to be identified.

“This was presented as a decision,” said one of the sources.

A Renault spokesman declined to comment on production plans for the fourth-generation Clio, France’s second-best-selling car. Some 41 per cent of its last version were built domestically, with 46 per cent sourced from Turkey and 13 per cent from Spain.

With unemployment at a 13-year high, French president François Hollande’s government has pledged to reverse the trend within a year and is pressuring companies such as ArcelorMittal and Sanofi to keep jobs in France.

Domestic plants accounted for 42 per cent of Renault’s overall European deliveries last year. That compares with 64 per cent for rival PSA Peugeot Citroen, which drew ministerial wrath by announcing 8,000 job cuts and a plant closure earlier this year.

Renault’s gradual transfer of production to lower-wage economies has already proved to be a sore point in relations with the French state, which owns 15 per cent of the automaker.

Chief executive Carlos Ghosn was summoned for a public dressing-down by former president Nicolas Sarkozy in 2010, after reports first emerged that the Clio could move abroad.

The news comes as Volkswagen halted production in Germany of its Passat model this week as part of a move to cut output for the year by about 300,000 vehicles.

The global production target for the VW group, which includes luxury division Audi, has been cut to 9.4 million cars this year, up on last year’s output of 8.5 million but short of the goal originally set for this year of about 9.7 million, said sources yesterday.They also said that VW had decided to keep the Passat production line shut in Emden, northwestern Germany following Wednesday’s national Reunification holiday, due to reduced orders from fleet customers. – (Reuters)