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Renault to Slash Jobs by 8 Percent

FRANKFURT — About eight million people around the world earn their living making cars and trucks. It’s becoming clearer that not all of them will come out of the pandemic with jobs.

The French carmaker Renault announced an emergency cost-cutting plan on Friday that is likely to serve as a grim template for an industry that was in deep trouble even before the coronavirus brought sales nearly to a standstill.

Renault said it would cut nearly 15,000 jobs worldwide, or about 8 percent of its work force, and pull out of China. The company also vowed a drastic reduction in production as it tries to deal with “the major crisis facing the automotive industry.”

Renault has been hit hard by the pandemic. Its sales in the European Union, the company’s most important market, fell almost 80 percent in April, when dealerships were closed and most buyers were not leaving their homes.

“It’s not just Renault,” said Peter Wells, director of the Center for Automotive Industry Research at Cardiff University in Wales. “There are too many factories, too many models, too many dealers. A crisis like this is ruthless in exposing the vulnerabilities of these companies.”

Nissan, Renault’s partner in a global automaking alliance, said Thursday that it would close factories in Indonesia and Spain as it reduces the number of cars it produces by a fifth. The announcement came after Nissan reported a loss for the fiscal year ending in March of 671 billion yen, or $6.3 billion.

Volvo Cars said last month that it would cut 1,300 white-collar jobs in Sweden, its base. Other carmakers, such as Fiat Chrysler and PSA, which makes Peugeot, Citroën and Opel vehicles, will be under pressure to make similar cuts.

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Credit…Thomas Lo Presti/Agence France-Presse — Getty Images

American carmakers cut thousands of jobs last year and have not announced new rounds of layoffs caused by the pandemic. Recently they have been gearing up production after factories were closed to prevent spread of the coronavirus.

Starting Monday, General Motors plans to have three sport-utility vehicle plants running two shifts per day instead of one, while three truck plants will go from two shifts to three. The increase is a response to reports from dealers that supplies of certain models are running thin.

Toyota, Honda, BMW and other foreign automakers have also restarted plants in the United States. Both G.M. and Fiat Chrysler have begun restarting production in Mexico this week.

While plants are again producing vehicles, automakers have not yet eased back on some of the cost-cutting measures they put in place when the virus began spreading rapidly in March. Those include executive pay cuts and suspension of shareholder dividends.

But with demand unlikely to recover to pre-pandemic levels for years, even the American automakers will not be able to avoid further painful cuts, Mr. Wells said.

Automaker job cuts reverberate far beyond the companies, afflicting other businesses like parts makers, dealers, car insurance providers, repair shops, and pubs and sandwich shops situated outside factory gates. Because of the massive economic fallout, plant closures face stiff resistance from labor unions and political leaders.

The unrest has already begun to manifest itself in Europe.

In Barcelona, some of the 3,000 workers who will lose their jobs at the Nissan facility burned tires outside the factory and marched in protest.

Workers at a Renault plant in Maubeuge, in northern France, walked out immediately after the job cuts were announced on Friday morning. The automaker is considering merging the plant in Maubeuge, where over 2,000 people work, with a nearby plant in Douai to produce electric cars and light commercial vehicles.

Renault said it would also make cuts in marketing and research and development, and halt expansion of factories in Romania and Morocco.

Fabien Gâche, a representative of the hard-line C.G.T. union at Renault, said Friday that the carmaker was cutting jobs but had no “firm, resolute strategy.”

“It is a continuation of what we have seen at Renault for about 15 years, unfortunately,” Mr. Gâche said at a news conference.

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Credit…Samuel Aranda for The New York Times

Labor strife adds to the upfront costs of corporate austerity and reduces the overall savings. Renault said it would spend 1.2 billion euros, or $1.3 billion, on severance pay and other expenses related to the plan announced Friday.

Automakers are in a delicate situation because they are asking for government aid even as they put thousands of people out of work. Renault’s announcement of job cuts came only three days after the French government pledged €8 billion to encourage sales of electric cars and help carmakers develop new digital technologies.

  • Frequently Asked Questions and Advice

    Updated May 28, 2020

    • My state is reopening. Is it safe to go out?

      States are reopening bit by bit. This means that more public spaces are available for use and more and more businesses are being allowed to open again. The federal government is largely leaving the decision up to states, and some state leaders are leaving the decision up to local authorities. Even if you aren’t being told to stay at home, it’s still a good idea to limit trips outside and your interaction with other people.

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      Touching contaminated objects and then infecting ourselves with the germs is not typically how the virus spreads. But it can happen. A number of studies of flu, rhinovirus, coronavirus and other microbes have shown that respiratory illnesses, including the new coronavirus, can spread by touching contaminated surfaces, particularly in places like day care centers, offices and hospitals. But a long chain of events has to happen for the disease to spread that way. The best way to protect yourself from coronavirus — whether it’s surface transmission or close human contact — is still social distancing, washing your hands, not touching your face and wearing masks.

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      Common symptoms include fever, a dry cough, fatigue and difficulty breathing or shortness of breath. Some of these symptoms overlap with those of the flu, making detection difficult, but runny noses and stuffy sinuses are less common. The C.D.C. has also added chills, muscle pain, sore throat, headache and a new loss of the sense of taste or smell as symptoms to look out for. Most people fall ill five to seven days after exposure, but symptoms may appear in as few as two days or as many as 14 days.

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      More than 40 million people — the equivalent of 1 in 4 U.S. workers — have filed for unemployment benefits since the pandemic took hold. One in five who were working in February reported losing a job or being furloughed in March or the beginning of April, data from a Federal Reserve survey released on May 14 showed, and that pain was highly concentrated among low earners. Fully 39 percent of former workers living in a household earning $40,000 or less lost work, compared with 13 percent in those making more than $100,000, a Fed official said.

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      There is an uptick in people reporting symptoms of chilblains, which are painful red or purple lesions that typically appear in the winter on fingers or toes. The lesions are emerging as yet another symptom of infection with the new coronavirus. Chilblains are caused by inflammation in small blood vessels in reaction to cold or damp conditions, but they are usually common in the coldest winter months. Federal health officials do not include toe lesions in the list of coronavirus symptoms, but some dermatologists are pushing for a change, saying so-called Covid toe should be sufficient grounds for testing.

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      The C.D.C. has recommended that all Americans wear cloth masks if they go out in public. This is a shift in federal guidance reflecting new concerns that the coronavirus is being spread by infected people who have no symptoms. Until now, the C.D.C., like the W.H.O., has advised that ordinary people don’t need to wear masks unless they are sick and coughing. Part of the reason was to preserve medical-grade masks for health care workers who desperately need them at a time when they are in continuously short supply. Masks don’t replace hand washing and social distancing.

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      If you’ve been exposed to the coronavirus or think you have, and have a fever or symptoms like a cough or difficulty breathing, call a doctor. They should give you advice on whether you should be tested, how to get tested, and how to seek medical treatment without potentially infecting or exposing others.

    • How can I help?

      Charity Navigator, which evaluates charities using a numbers-based system, has a running list of nonprofits working in communities affected by the outbreak. You can give blood through the American Red Cross, and World Central Kitchen has stepped in to distribute meals in major cities.


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