Does Renault have to cut 7,500 French jobs?

French car maker Renault is making its workforce pay for the extreme austerity policies of the French and other EU governments and its multi-billion-euro largesse to shareholders.

It aims to cut 7,500 jobs – or 14% of the payroll – in France by 2016, citing falling demand, caused by spending cuts hitting purchasing power across the Continent.

French car registrations fell 15 percent last month, leaving the full-year down 14 percent to 1.9 million vehicles – the lowest since 1997. Renault group’s French registrations plummeted  27 percent in December.

Coming hot on the heals of plans by rival French carmaker PSA Peugeot Citroen to axe more than 10,000 domestic jobs and close an assembly plant near the French capital, the Renault announcement is deeply embarassing for President Francois Hollande, who has made creating employment his priority for this year as the jobless rate reaches 13-year highs.

Renault said most jobs would go through natural wastage, with the balance removed via early retirement, but plant closures would go ahead unless workers accepted changes to pay and working conditions. Not improvements, to be clear.

CGT union rep Fabien Gache said: “This is a fresh bloodletting among staff which will weaken Renault further over the coming years.”

Bad news for the employees, but not for shareholders, who have been served well by the company, receiving 324 million euros in dividend payments in 2011, the most recent year for which global figures are available. That is not far off the sum the job cuts and detrimental pay/conditions deal would save the company – about 396 million euros (£328m) between this year and 2016. Shares in Renault closed 1.8 percent higher on the announcement.

Both carmakers have been enjoying generous state support (that is, the taxes of the 99%) in recent years – up to 7.5 billion euros: 6.5 billion euros made available to them by former President Nicolas Sarkozy in 2009 to use for ‘innovation’, and subsequently a further one billion for their finance arms to provide credit to cash-strapped consumers to buy their products.

That’s obviously been good for the bosses. Peugeot CEO Philippe Varin took home 1.3 million euros in 2011.  Renault boss Carlos Ghosn took home 2.9 million euros that year.

Who will pay these exorbitant costs of capital? The workers, as usual,  footing the bill of greed, and policies designed purely to benefit the rich. A familiar story.