Renault to Extend Crisis-Period Labor Deal in 2010

French manufacturer Renault confirmed in a statement that it plans to extend the crisis-period labor deal it established in 2009 through the next year. Furthermore, the company wants to rely on moderate pay raises as well, a move which wasn't possible in 2009, as it said in a release.

Basically, Renault expects the auto sector to lose ground in 2010, as scrapping schemes in Europe will end the next year. The company forecasts a drop of 8 percent of the European car market, as compared to 2009. Renault’s industrial sites in France could experience an average 45 non-worked days, it explained in the statement.

As a result, Renault is looking into ways to extend the labor deal in 2010, in an effort to protect jobs and prevent salary cuts.

"Given the outlook on future activity, this agreement remains as necessary as before. This is why Renault management has proposed to extend the crisis-period labor deal, which comes to an end on December 31, 2009, in practically identical form," Renault said.

Here are the salary proposals for production workers and non-managerial staff, as provided by Renault:

• a global increase in pay of 0,7% (with a minimum of 11 euros) together with individual raises of 0,6% in average,
• a supplement to the profit-sharing scheme (subject to approval by the Board of Directors) of 450 euros for all personnel categories, in recognition of employees' commitment to obtaining positive free cash flow,
• the opening of discussions with trade unions on the payroll policy for non-managerial staff.

A final decision will be made on December 14, 2009 as Renault's management will hold a meeting with employee representatives.