Renault workers urged not to return while carmaker looks to close credit line
27 April 2020
27 April 2020
A trade union has urged staff at Renault’s Flins plant not to return before 11 May, claiming it was still too risky given the current coronavirus (COVID-19) situation.
The SUD union said Renault management had asked workers to return to the factory near Paris from 28 and 29 April onwards. They argued that this would be two weeks before the 11 May date set by the French government for the easing of the national lockdown.
The union added that Renault is refusing to allow workers to return on a ′voluntary basis.’ Only employees who have a certain illness, and those caring for children until schools reopen, can ask not to come back immediately. In their statement, the union claimed that measures put in place by management at the plant and in transport will not be enough to prevent employees from becoming infected by COVID-19.
When approached by the Daily Brief team, Renault did not comment on the matter.
The Flins factory, which builds the electric Renault Zoe and the Nissan Micra, is set to be the first Renault assembly plant to start back up again after the carmaker closed its European facilities in the middle of March. The manufacturer hopes to get production up and running again in May.
News also emerged last week that Renault is close to securing a credit line from the French government. The state-guaranteed loan given through the banks is estimated to be as much as €5 billion in the coming weeks. This would support the carmaker as COVID-19 costs it €600 million a month, excluding working capital. The state also remains Renault’s biggest shareholder, with over 15% of the capital.
′We don’t have any visibility on the length of the crisis, nobody has, so as there is a possibility to go get credit facilities with the French state’s backing″¦″‰we are going to go get it to be on the safe side,’ said Renault’s interim chief executive Clotilde Delbos, as reported by the Financial Times. She expects the agreement to be in place by the second half of May.
The French manufacturer burnt through more than €5 billion in the first quarter of 2020. It had €10.3 billion in liquidity reserves at the end of March, down from €15.8 billion at the end of 2019. Delbos put a large amount of this decrease down to a seasonally expected increase in working capital.
′We have sufficient liquidity to cover this cash burn,’ she said, explaining that the state-backed loans were a ′safety net’ for a ′black scenario,’ alongside other credit lines being negotiated in emerging markets.
The carmaker’s production workers are currently on partial unemployment schemes, while 85% of their non-factory workers are on half-time. Renault has also slashed its marketing budget in half. The manufacturer has cancelled its dividend and suspended financial guidance, claiming it was ′impossible to assess’ what the impact would be this year.