ZF Friedrichshafen to cut up to 15,000 jobs, expects financial losses in 2020

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French carmaker Renault is poised to announce 15,000 layoffs worldwide on Friday as it unveils a plan to boost its profitability and cope with faltering sales, a representative for the CFDT union said after meeting with the company.

Some 4,500 jobs would go in France, though largely through a voluntary departure plan and a retirement scheme, the CFDT’s Franck Daout told Reuters on Thursday.

“They’ve insisted on the fact everything will be negotiated,” Daout said, adding that unions and state bodies would be involved in talks over potential job losses in France.

Renault was not immediately available for comment.

The French group, which is 15% owned by the government, had earlier this year flagged a looming “no taboo” plan to cut 2 billion ($2.2B) in costs after posting its first loss in a decade last year.

This has raised concern for some of its factories, including in France, although closures could be politically sensitive.

The French government has already said it will not sign off on a planned 5 billion euro ($5.5B) state loan for Renault – an aid measure linked to the coronavirus pandemic – until management and unions conclude talks over the carmaker’s French workforce and plants in France.

The coronavirus crisis has compounded the carmaker’s problems, accentuating a slump in demand which was already dragging on sales.

ZF Friedrichshafen to cut up to 15,000 jobs, according to memo

German car parts supplier ZF Friedrichshafen plans to reduce the workforce by up to 15,000 jobs, or around 10%, by 2025 as a result of a slump in demand, according to a memo on Thursday.

ZF, which helps carmakers develop gearboxes and hybrid drivetrains, said in an email to employees that half of the 12,000-15,000 job cuts would be in Germany.

The company employed 147,797 people at the end of 2019, according to its annual report.

“As a result of the demand freeze on the customer side, our company will make heavy financial losses in 2020,” chief executive officer Wolf-Henning Scheider wrote in the email memo that was seen by Reuters.

“These losses threaten our financial independence,” he wrote. “The crisis will last longer, and even in 2022 we will fall noticeably short of our targets for sales.”

A spokesman declined to comment.

German media including DPA and Suedkurier first reported the planned cuts.

(Reporting by Gilles Guillaume Sarah White and Tom Sims)

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Saurabh Shukla

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