Rabat – French automotive manufacturer Renault announced its decision to suspend capacity increase projects in Morocco as parts of its plans to weather the economic crisis.
Renault’s plans include freezing investments and halting capacity increase projects in both Morocco and Romania, a statement from the company has said.
The company also intends to introduce a study of the adaption of the group’s production capacities in Russia as well as a “study of the rationalization of gearbox manufacturing worldwide.”
The transformation plan seeks to achieve savings of more than €2 billion over three years.
“The difficulties encountered by the Group, the major crisis facing the automotive industry, and the urgency of the ecological transition are all imperatives that are driving the company to accelerate its transformation,” the statement reads.
According to the company, the plan, which currently remains a draft, aims to reinforce the manufacturer’s resilience.
In France, the company intends to cut 4,600 jobs, representing 10% of the company’s total employment. Around the company, is looking to cut approximately 14,600 jobs. Renault says it will eliminate the jobs through voluntary retirement and retraining.
The manufacturer also seeks to lower production capacity by a fifth in a move to reduce costs as the automotive sector continues to suffer due to the COVID-19 pandemic, reported Reuters and Bloomberg.
Renault is among the companies facing criticism from French Economy Minister Bruno Le Maire.
Earlier this month, the official criticized his country’s automotive companies, including PSA and Renault.
“I think the French automotive industry has outsourced too much, it must be able to relocate certain productions,” he said.
The French Automobile Manufacturers’ Committee (CCFA), however, backed the French producer’ operations in Morocco and reassured that its official position supports the full involvement of both automotive manufacturers in the North African country.
“There is no questioning on the part of French manufacturers,” CCFA affirmed.
