The agreement has been made in response to the continued problems with the European automotive market that contributed to a 15% fall in net profits for Renault last year and have led to rivals such as PSA announcing plant closures and job losses.

The carmaker said that the agreement, which follows nearly nine months of discussions and negotiations with the unions, means that it ‘will be able to consolidate its French base while at the same time growing on the international front with a view to adapting to today’s worldwide automobile industry’. 

Under the contract, Renault has been given the go-ahead to cut 7,500 jobs by 2016 through attrition as well as implement a wage freeze and increase the average number of weekly working hours to 35 from 32.

In return, the carmaker has committed to producing at least 710,000 vehicles in France by 2016, compared with just over 530,000 vehicles in 2012. This will take the overall utilisation rate of the facilities in France to more than 85% and permits long-term visibility for the activity of the company’s French sites until 2016, and furthermore up to 2020.

As well as maintaining activity at all its production sites in France, Renault has committed to continuing its engineering, sales and marketing, and tertiary services departments. 

Following the official signature, Renault CEO Carlos Ghosn thanked the unions for their work, adding: ‘Thanks to their engagement, as well to our mutual determination to concert and look ahead to the future, we have been able to rise successfully to the challenge of producing an agreement which not only complied with the rules of collective bargaining, but which is also just for the workforce and which provides solid foundations for the company’s sustainable growth.

‘This agreement is excellent news for Renault and for those businesses involved in the automotive industry in France. Indeed, it provides proof that an approach based on a spirit of social innovation and responsibility can open up new and promising horizons.’