French carmaker Renault denied claims by a union leader that it intend to close two of its plants in France unless it secures a deal to boost productivity, hold back pay and reduce the workforce. Dominique Chauvin, head of the CFE-CGC union at Renault, said Tuesday that the carmaker may be planning to shut down its Flins plant in France.
In response, Renault issued a statement saying that it has never said that two sites could be closed if they fail to reach an agreement in the current talks over the performance of French sites.
The carmaker said that the discussions were targeted at seeking ways to increase competitiveness. Renault earlier said Tuesday that it is willing to increase production in France by 15% once a labor agreement is reached.
Renault said that its local plants may build 80,000 more vehicles a year by 2016 to supply other carmakers it cooperates with, including Nissan and Daimler.
The carmaker currently has the capacity to produce 530,000 vehicles annually in France for its own brand.
Gerard Leclercq, Renault's head of operations in France, said in a statement that the agreement will enable its French plants to be sufficiently competitive to attract volumes coming from their partners. Renault wants unions to agree to a wage freeze in France increase, with an increase of 0.5% in 2014 and 0.75% in 2015.
Renault commenced negotiations with unions in November 2012 as part of its efforts to maintain profit while the European car market drops to its two-decade low.
Renault posted a 6.3-percent drop in deliveries around the world to 2.55 million cars and light vehicles in 2012. The situation was worse in Europe, where the carmaker logged a 19-percent dive. Renault expects the industry-wide European car sales to drop 3% in 2013.