Renault signs first competitiveness agreement for France

The French car manufacturer Renault signed an agreement with unions in March 2013 intended to improve its competitiveness, avoid the closure of any of its French sites and avert any redundancies. Around 7,500 jobs will be cut through non-replacement of staff who choose to leave voluntarily. It is the first time that the group has negotiated this type of agreement in France, but it has previously signed similar agreements in Spain. Of its 128,653 employees, 42% are based in France.

French production preserved

The management of the French car manufacturer Renault has signed an agreement with union representatives of the French Confederation of Professional and Managerial Staff – General Confederation of Professional and Managerial Staff (CFE-CGC), the French Democratic Federation of Labour (CFDT) and the General Confederation of Labour – Force ouvrière (CGT-FO).

The aim of the Contract for a new growth dynamic and for social development (in French, 119Kb PDF), signed on 13 March 2013, is to implement a standard organisational structure and allocate a specified volume of manufacturing to French workers. The group is expected to produce at least 710,000 vehicles in France in 2016, compared with just over 530,000 vehicles in 2012. According to Renault, this will utilise over 85% of the company’s French facilities.

Renault has made a commitment to maintain its activities at all production sites in France, including the company’s engineering, sales and marketing activities, and its service departments. This means that the car manufacturer will avoid the need for plant closures in France and will be able to reduce its workforce without the need for redundancies. The agreement does include the loss of 7,500 jobs, but this will be achieved by non-replacement of staff who leave voluntarily. The company forecasts savings of up to €500 million per year as a result of the implementation of the agreement.

Regional employment hubs

The agreement creates two regional manufacturing centres, called ‘hubs’ – one in the Seine valley and another in the north of the country. The aim of this measure is to provide geographical mobility between the company’s sites, including mobility within the centres themselves, and to merge those functions that provide non-manufacturing support for day-to-day manufacturing operations.

Functions including general management, human resources, quality control and accountancy will be amalgamated and located within one of the two hubs, creating economies of scale and cost reductions through a shared services support model.

Working time and wages

The agreement harmonises and increases working time to 35 hours per week on average over the year (in shifts or standard working hours), a total of 1,603 hours per year for each worker at all Renault sites in France. Previously, working time was on average less than 35 hours at some sites. The extra working hours introduced at these sites could potentially generate five to 10 days off per year. The agreement also introduces greater flexibility in working time. The agreement maintained wages in 2013 at the same level as in 2012. Wage moderation will be emphasised at the compulsory annual negotiations in 2014 and 2015.

Training and working time accounts

The agreement will end the previous system of training time accounts, replacing it with training action plans, identified in working time training plans. Any credit accumulated under the previous system by an employee and held in their training time account will be transferred to a transitional account and preferably taken as leave during the transition period.

The statutory individual training allowance will be introduced (an ‘individual right to training’), entitling employees to train outside their normal working time and in accordance with the provisions in the metal sector agreement which entitles full-time, permanent employees to 20 hours a year for training.

The signatories agreed to limit the number of days that workers are able to accrue in their individual working time account to 15 days by December 2016, and to 10 days thereafter. At the end of each year, any remaining leave in excess of 15 days that is not taken will be lost.

Forward-looking management of jobs and skills

The signatories want to extend the forward-looking employment and skills management provisions (GPEC) to the end of 2016. This agreement, signed in 2011, is valid until the end of 2013, and aims to anticipate the skills needs of companies by offering targeted training, improved mobility and recruitment plans, simultaneously enhancing an individual’s employability.

The new agreement at Renault extends one measure of the GPEC scheme which in effect suspends the employment contracts of workers three years before they are eligible for a full pension. The scheme is currently available for those aged 58 and over if they have worked in difficult or dangerous jobs (or 57 for employees with long careers or with a disability). This system, through which eligible workers are paid 75% of their existing wage, will now be open to all employees whether or not they have worked in difficult or dangerous jobs.

The principle of ‘quality of life in the workplace’ features in the agreement, and a joint working group will be created to formulate the precise measures to be implemented.

Reactions of the social partners

The three union signatories won 65% of the total votes in workplace elections.

The union that won most votes, the CFE-CGC, has said it considers the agreement not to be a win-win settlement but, rather, a bet on the future.

The CGT-FO, the second largest union with 26.5% of the votes, at first refused to sign the agreement. It was placated when references to forced geographical mobility, considered by the union to be ‘unacceptable’ were deleted from the agreement, and when Renault made a commitment to retain specified volumes of production in France. The CGT-FO, in a press release (119kB PDF, in French), said it sees the agreement as a compromise that represents a ‘new social regression until 2016’ and an insufficient alternative to job cuts and wage freezes.

For the CFDT, the agreement ‘represents a balanced compromise for years to come’, even if it represents only one step in the reestablishment of the competitiveness of the manufacturer.

Renault’s Chair and President Carlos Ghosn said that ‘this agreement provides proof that an approach based on a spirit of social innovation and responsibility can open up new and promising horizons’. He also welcomed ‘a largely consensual agreement with over two-thirds of employees represented in a country more used to the struggle between social partners’.

Commentary

Company-level collective bargaining takes place at a time when the social partners have already negotiated an agreement on national level labour market reforms (FR1302011I), which specifically invites the social partners to conclude agreements on competiveness at company level.

The Renault agreement is the first of its kind in France, although recently competitiveness agreements have been negotiated to safeguard jobs, such as the one reached at the PSA Peugeot-Citroën Sevelnord automotive production factory (FR1209041I).

Frédéric TURLAN, IR Share

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