Bloomberg News

Renault Plans to Lay Off 2,295 Employees at Spanish Factory

December 01, 2011

(Updates with Spanish sales declines from fourth paragraph.)

Nov. 30 (Bloomberg) -- Renault SA plans to lay off 2,295 workers at its plant in Valladolid, Spain, for as many as 29 days in the first half of 2012 as Europe’s economy slows.

The Boulogne Billancourt, France-based company will also suspend the night shift at its Palencia plant from the start of January, affecting 300 workers, Renault spokesman Jesus Presa said by telephone.

“Fifteen of the lay-off days are due to a shift to new model production, while 14 days are because of the economic downturn,” Presa said.

Car sales in Spain fell 20 percent in the first ten months of 2010, the most of Europe’s top five auto markets, according to the European Automobile Manufacturers Association. Ford announced plans last week to lay off 4,000 employees at its assembly plant in Valencia, Spain, for 39 days next year.

On the furlough days, the Valladolid plant will produce as few as 340 vehicles, compared with its usual 460 cars, Renault’s Presa said, declining to predict the effect on overall capacity as the company may decide to shorten the production cut. The factory produces the Clio and Modus models and will soon start producing the electric Twizy.

The Palencia plant, which produces the Renault Megane, will produce as many as 100 vehicles less than its normal 1,040 cars each day, Presa said.

Renault paused production for two days at its plant in Douai, France last month, while French competitor PSA Peugeot Citroen is planning to eliminate as many as 3,500 permanent staff.

The employees laid off at Valladolid will receive between 65 percent and 70 percent of their salaries for the furlough days, according to Presa.

Renault shares traded 3 percent lower at 25.57 euros at 11:02 a.m in Paris.

--Editors: Thomas Mulier, Jerrold Colten

To contact the reporter on this story: Alex Webb in Frankfurt at awebb25@bloomberg.net

To contact the editor responsible for this story: Chad Thomas at cthomas16@bloomberg.net


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