UPDATE 1-Renault pledges extra production for labour deal

Tue Jan 22, 2013 9:36am EST

* Says French factories could make 80,000 extra vehicles/yr

* Renault proposes pay freeze for 2013 (Adds detail, background)

PARIS Jan 22 (Reuters) - French carmaker Renault told unions it could produce an extra 80,000 vehicles a year at its domestic factories for partners Nissan or Daimler if workers agreed to a new labour deal.

That would represent 15 percent of 2012 French production for the automaker, which is pushing workers to accept a new nationwide agreement on pay and conditions to cut costs.

The company also said on Tuesday that it had proposed a pay freeze this year, followed by a 0.5 percent increase next year and a 0.75 percent rise in 2015.

Salaries increased by 3 percent in 2012.

The proposals were made public after the latest in a series of meetings with staff representatives as Renault pushes to align productivity in France with cheaper European sites in Spain and the UK.

Renault's domestic plants are among the worst affected by car industry overcapacity, which has swollen as many European countries have gone into recession. Renault sold 2.55 million vehicles worldwide last year; it did not say how many of those were produced in France.

The carmaker told unions at a meeting last week that it was aiming to cut 7,500 jobs in France by 2016 to help boost competitiveness as the slump in its domestic and European markets shows no sign of easing.

The French government, Renault's biggest shareholder with a 15 percent stake, has said it wants the carmaker to support domestic employment by building cars for Nissan, its 43.4-owned Japanese affiliate.

Rival French carmaker PSA Peugeot Citroen is struggling to reverse mounting losses by scrapping more than 10,000 domestic jobs and closing an assembly plant near Paris. (Reporting by Gilles Guillaume; Editing by Christian Plumb)

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