Renault braced for French dealership strike

PARIS, March 13 Thu Mar 13, 2014 11:08am EDT

PARIS, March 13 (Reuters) - Renault was braced on Thursday for a strike at its in-house dealerships that may cause a wobble in the French carmaker's recovery from a long slump in auto demand.

The Renault Retail Group subsidiary's four main unions are all backing the Friday-Saturday strike call to press pay demands, coinciding with "open days" when dealers wheel out heavily advertised special offers to shift more vehicles.

Renault vowed to keep all dealerships open throughout the two-day industrial action and serve all customers.

"We are hoping there will be no impact on sales," a company spokeswoman said.

Renault's earnings have been partly sheltered from Europe's six-year sales slump thanks to the company's recession-proof low-cost cars and 43.4 percent stake in Nissan.

The group's French registrations have bounced back 6.5 percent so far this year as the market slid 0.5 percent year-on-year, according to industry data for January-February.

But the sales network has been hit by the collapse of the French market, still 13 percent below its 2007 peak, triggering job cuts and a wage freeze across the in-house dealerships that account for one-third of Renault's domestic sales.

This year, according to unions, Renault is proposing a core pay increase between 0.7 and 1.3 percent with the possibility of merit-based individual raises in addition.

While leftwing unions are demanding bigger increases, the centrist CFE-CGC is pressing Renault management to contribute to an employee health insurance scheme instead.

"We're not completely backward - we have to evolve with the times," union representative Jean-Christophe Morandini said.

"We need to go out and win a bigger share of the market, but all Renault wants to do is cut headcount."

The Renault Retail Group reduced its French workforce by almost 500 staff last year to 6,800 as of Dec. 31 through natural attrition and a hiring freeze, the carmaker said.

"The auto market is at a historic low, so of course pay awards are limited everywhere," the company spokeswoman said. "Renault is grateful for the efforts its staff are making." (Reporting by Laurence Frost; Editing by Mark Potter)