The French government urged Renault to intervene in a strike at engine-parts supplier Montupet that may hit production. Hit the jump to read the rest of the story.
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Workers at Montupet, which provides more than 70 percent of cylinder heads for Renault’s engines and also supplies PSA/Peugeot-Citroen, are staging a five-week strike at the Ingrandes plant in western France in protest at plans to cut wages.
“We have asked that Renault invite its supplier to show more responsibility,” Industry Minister Eric Besson said on Tuesday in the National Assembly, the French parliament’s lower house. “We won’t be letting Renault turn a blind eye.”
Renault expects no impact on output “in the short term,” a company spokesman said. The automaker has stockpiles of cylinder heads and can push sales of unaffected engine models to make the inventory last longer, the spokesman said, declining to elaborate on stock levels.
With President Nicolas Sarkozy trailing Socialist rivals in opinion polls six months before elections, his center-right government is keen to avoid plant closures and layoffs. The state has a 15 percent stake in Renault and two board seats.
Renault sold off most French foundries more than a decade ago before repurchasing two of them to improve quality and secure supplies against industrial action.
The CGT union, which backs the strike, wants Renault to buy the Ingrandes plant.
“For the moment it’s unclear whether Renault already has plans to shift production overseas or whether they will be forced to intervene,” CGT spokesman Fabien Gache said. “We know Renault will be experiencing parts shortages, and some will begin to run out this week.”
The Ingrandes strike intensified after Oct. 30 talks in which Montupet reiterated plans to cut basic pay by 15 percent.
Renault and PSA suffered severe disruption from April’s Japanese earthquake and tsunami, and several PSA plants lost additional days of production because of a logistics problem at Agrati, a key supplier.
