UPDATE 2-Renault links pay deal to production plans - unions

Tue Nov 6, 2012 3:05pm EST

* Renault seeks concessions on pay, working time

* Links production plans to deal - unions

* Company wants agreement by end of January

* Four more meetings with unions planned by year's end

By Laurence Frost and Gilles Guillaume

PARIS, Nov 6 (Reuters) - Automaker Renault demanded pay and working time concessions from its French workers on Tuesday and warned that the outcome of talks may affect future production plans, unions said.

Opening negotiations on a new nationwide labor deal, Renault indicated that it wanted an agreement by the end of January and it would not choose production sites for future models before then, according to workers' representatives who attended the meeting.

"There is a clear blackmail attempt here to link factory decisions with the productivity issues," a CGT union official said.

Renault said in a statement that "all proposals and solutions" will be discussed during "at least" four more meetings with union representatives by the end of the year.

The next meeting will take place on Nov. 13, the company said.

Faced with a sustained slump in the European car market, Renault wants to align French wage and production costs with its plant in Palencia, Spain, and Japanese affiliate Nissan's Sunderland factory in England, Chief Operating Officer Carlos Tavares said in September.

The start of negotiations came as the French government unveiled long-awaited measures to improve the country's industrial competitiveness with 20 billion euros ($25.6 billion) in tax breaks designed to lower overall labor costs.

The proposals are a response to a government-commissioned report presented on Monday by industrialist Louis Gallois. Renault, Peugeot and their suppliers have led calls by French manufacturing companies for action to reduce the charges they pay on top of payroll costs.

PSA Peugeot Citroen, Europe's second-biggest automaker, has announced plans to cut 8,000 additional French jobs, close a major assembly plant near Paris and shrink another. The Paris-based company is scheduled to begin detailed negotiations on the job cuts on Wednesday.

Renault, in which the French government holds a 15 percent stake, has so far resisted domestic closures.

But the car maker offered to negotiate undertakings to keep a minimum level of future production and engineering activities in France in return for a productivity and pay deal, said union officials who were present.

The company wants French workers to accept similar measures to those announced in Spain, where it is increasing working time, freezing salaries and cutting pay for new hires, they said.

Renault's push for a new labor pact echoes concessions won by Peugeot at its Sevelnord plant in northern France - including a pay freeze, reduced leave and flexible hours - after threatening to close the site in addition to its Aulnay factory.

Ford also announced 6,200 job cuts last month and the closure of a large Belgian assembly plant, along with a smaller British van factory and associated stamping facility.