Renault SA (RNO.PA) to Cut 15,000 Jobs
Renault acknowledged that its international ambitions had been unrealistic, saying plans to cut about 15,000 jobs, shrink production and restructure French plants as it pressed the reset button and wanted to banish the spectre of Carlos Ghosn.
Faced with a slump in demand that has been exacerbated by the coronavirus pandemic, the French automaker detailed plans on Friday to find €2 billion (RM9.7 billion) in savings over ensuing three years.
“We thought too big in terms of sales,” said interim Chief executive Clotilde Delbos, adding the company was “coming back to its bases” after investing and spending too much in recent years.
Renault was under pressure even before Covid-19 hit, posting its first loss in a decade in 2019, and has said nothing would be “taboo” as it reviews its business.
It plans to trim its international capacity to 3.3 million vehicles in 2024 from four million now, focusing on its most profitable models and areas such as electric cars while freezing manufacturing growth in countries like Romania.
Renault, like its Japanese alliance partner Nissan, is rowing back on an aggressive expansion plan pursued by Ghosn, its former boss-turned-fugitive, who is wanted on charges of financial misconduct in Tokyo. Ghosn denies the charges.
“The mindset has fully changed. The previous line was volumes and sales and being the first on the podium,” Delbos said. “We’re not trying to be on top of the world, what we want is a sustainable and profitable company.”
The company, due to bring ex-Volkswagen executive Luca de Meo on board as CEO in July, said it would cut prices by reducing the number of subcontractors in areas such as engineering and also the number of components it uses, as well as shrinking gearbox manufacturing worldwide.
Delbos ruled out the need for a rights issue, saying Renault was close to sealing a €5 billion credit line guaranteed by the French Government.
Renault shares were down 5.3 per cent by 1223 GMT, the worst-performing stock on France’s blue-chip index.
The car manufacturer said it was in talks with unions. Six sites out of Renault’s 14 plants in France — including a component factory in Brittany and the Dieppe factory where the group’s Alpine cars are made — will be under review, though most changes would take effect after 2022, Delbos said.
Some of the six plants like the one in Flins, close to Paris, where it makes its electric Zoe models, might cease to assemble cars and centre on recycling activities instead, the company said.
The Government has said it will not sign off on the state-backed loan until management and unions conclude talks over jobs and factories in France. It is seeking additional clarity on how some big factories will be organized and further guarantees on jobs before it gives the green light, according to a source familiar with the matter.
In all, just below 10 per cent of Renault’s global workforce will be affected by layoffs, and restructuring measures will cost €1.2 billion. There will be about 4,600 job cuts in France, though Renault said it might prioritise employment transfers, voluntary departures and retirement schemes.
French unions expressed frustration.
“This arrangement is unbalanced, at the expense of French activities,” the moderate CFDT union said today, adding that other countries had been less affected.
Getting over Ghosn?
Renault is still struggling to move on from the scandal involving Ghosn, that strained its relations with alliance partner Nissan and paralysed joint projects.
Ghosn, who ran Renault and was the chief architect of the alliance, was arrested in Japan in late 2018 on financial misconduct charges, however fled to Lebanon in December last year. He has denied wrongdoing and hit out at his past employers.
Renault and Nissan have been hit hard by the pandemic just as they were making an attempt to rework their partnership. Nissan this week also outlined a plan to become smaller and more efficient.
The pair were among the weakest global automakers going into the crisis, lacking a clear plan for using their alliance to emerge from the slump and share the burden of investment in electric vehicles and alternative technology.
Germany’s BMW also confirmed today that it was in talks with its works council over job cuts, however declined to provide concrete figures. news agency dpa reported the car maker plans to slash around 6,000 jobs, 4.8 per cent of the carmaker’s total.
Overall, the bias in prices is: Downwards.
Note: this chart shows extraordinary price action to the upside.
The projected upper bound is: 23.62.
The projected lower bound is: 17.19.
The projected closing price is: 20.41.
A black body occurred (because prices closed lower than they opened).
During the past 10 bars, there have been 7 white candles and 3 black candles for a net of 4 white candles. During the past 50 bars, there have been 20 white candles and 30 black candles for a net of 10 black candles.
A falling window occurred (where the bottom of the previous shadow is above the top of the current shadow). This usually implies a continuation of a bearish trend.
Momentum is a general term used to describe the speed at which prices move over a given time period. Generally, changes in momentum tend to lead to changes in prices. This expert shows the current values of four popular momentum indicators.
One method of interpreting the Stochastic Oscillator is looking for overbought areas (above 80) and oversold areas (below 20). The Stochastic Oscillator is 75.2211. This is not an overbought or oversold reading. The last signal was a sell 0 period(s) ago.
Relative Strength Index (RSI)
The RSI shows overbought (above 70) and oversold (below 30) areas. The current value of the RSI is 57.06. This is not a topping or bottoming area. A buy or sell signal is generated when the RSI moves out of an overbought/oversold area. The last signal was a buy 45 period(s) ago.
Commodity Channel Index (CCI)
The CCI shows overbought (above 100) and oversold (below -100) areas. The current value of the CCI is 105.This is an overbought reading. However, a signal isn’t generated until the indicator crosses below 100. The last signal was a sell 8 period(s) ago.
The Moving Average Convergence/Divergence indicator (MACD) gives signals when it crosses its 9 period signal line. The last signal was a buy 45 period(s) ago.
Rex Takasugi – TD Profile
RENAULT closed down -1.580 at 20.320. Volume was 15% above average (neutral) and Bollinger Bands were 28% narrower than normal.
Open High Low Close Volume 21.245 21.500 20.170 20.320 3,393,628
Technical Outlook Short Term: Neutral Intermediate Term: Bullish Long Term: Bearish
Moving Averages: 10-period 50-period 200-period Close: 19.07 17.54 36.55 Volatility: 149 114 82 Volume: 4,263,966 2,668,600 2,048,881
Short-term traders should pay closer attention to buy/sell arrows while intermediate/long-term traders should place greater emphasis on the Bullish or Bearish trend reflected in the lower ribbon.
RENAULT gapped down today (bearish) on normal volume. Possibility of a Runaway Gap which usually signifies a continuation of the trend. Four types of price gaps exist – Common, Breakaway, Runaway, and Exhaustion. Gaps acts as support/resistance.
RENAULT is currently 44.4% below its 200-period moving average and is in an upward trend. Volatility is extremely high when compared to the average volatility over the last 10 periods. There is a good possibility that volatility will decrease and prices will stabilize in the near term. Our volume indicators reflect moderate flows of volume into RENA.PA (mildly bullish). Our trend forecasting oscillators are currently bullish on RENA.PA and have had this outlook for the last 4 periods.
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