Carlos Ghosn was considered a brilliant CEO until Japan decided to arrest him. That led Renault and its alliance with Nissan to suddenly lose the guidance that made them work. Renault knew it needed another brilliant executive to run its business and hired Luca de Meo, who has just shown why he was a good pick by turning Renault’s Flins plant into a “Refactory.” That killed two birds with one stone: it gave Renault the perfect excuse to stop manufacturing there and placed it as an environmentally concerned automaker.
First of all, Renault did not say it will close Flins, which currently produces the Zoe and the Nissan Micra. It just said it would consolidate electric car manufacturing in Douai – another of its production facilities – and that Flins would become a “Refactory” by doing four things: retrofit, “reenergy,” recycle, and restart.
The retrofit part proposes to turn combustion-engined cars into electric vehicles, but that will be seemingly a limited part of the “retrofit” mission. Renault will reserve that mostly to professional customers and fleet owners to “extend significantly the life of vehicles.”
That implies simply keeping them running, not necessarily as EVs. In fact, Renault states the retrofit is the “conversion of combustion-engined vehicles to other less carbon-based energies.” In other words, they can become hybrids or plug-in hybrids, which would make retrofits a lot easier.
With this strategy, Renault will also get second-hand cars and turn them into spare part sources. Instead of producing them – and bearing the costs of making new parts for used vehicles – it will reuse parts in good conditions. Tesla is doing something similar to the original Roadster.
Renault expects that will reduce turnaround time from 21 days to just 6 days between getting used cars and putting them back for sale. The company plans to refurbish at least 45,000 cars per year in Flins starting in September 2021. That will make the surviving cars last longer at a reduced cost, which involves the “recycle” part of the strategy.
The components that are not in a good shape will be converted into raw materials. Electric cars, such as the Zoe, will have their batteries analyzed and fixed. This may help Renault avoid the plague of high battery pack prices that affects the Nissan Leaf.
Both the Zoe and the Leaf use air-cooled batteries, which do not last as much as liquid-cooled packs. By handling the recycling process, Renault can offer cheaper replacements for owners that want to keep driving their Zoes at an affordable price and still use the batteries that are not good enough for automotive applications in stationery packs. That’s the “reenergy” bit of the plans for Flins.
Regarding the restart part, Renault wants Flins to become a startup incubator and a knowledge-sharing environment – not only for new companies but also for everybody that wants to conduct circular economy projects.
With this proposal, Renault makes a fantastic case for cutting production capacity without losing financial support from the French government. As Bloomberg clarified, Emmanuel Macron made production in France a condition for a €5 billion loan the French government would grant Renault. He just did not say where production had to happen in France.
Excessive production capacity is a huge burden for legacy automakers. Not only due to the investments in machinery, but especially because of the human resources involved. Renault needs to cut 14,600 jobs worldwide, and the French union CFDT already said it would not accept that to happen in France.
Renault’s idea for Flint seems to be not to fire people but rather to find something else for them to do. Something noble that will have Flins reach a negative carbon balance by 2030 and employ more than 3,000 workers by then. Currently, it would have around 2,400 employees. It will be hard for CFDT to oppose “saving the world” and for anyone to argue this was not a brilliant move from Luca de Meo.
Source: Bloomberg and Renault