Covid-19: “If there is no recovery in the second half of November, we will see the closure of automobile factories”, says Luc Chatel

The former minister today President of the Automotive Platform (PFA) pleads for a reopening of concessions. 60,000 jobs are threatened by this new confinement, according to him.

“If there is no recovery in the second half of November, we will gradually – as in the spring – see the closing of automobile factories”, worries Monday, November 9 on franceinfo minister Luc Chatel, minister under Nicolas Sarkozy, today president of the Automotive Platform (PFA) which brings together several players in the sector who are asking for the reopening of concessions to avoid the collapse of the market or the closure of factories. “I remind you that there are 400,000 jobs in the automotive industry in France. We made a projection with the Union des Métiers de l’Industrie and it appears that the jobs threatened by this crisis are in the order of 60,000. This is considerable. ”

franceinfo: During the first confinement, the automobile had plunged in the world and in France, with sales down 90%. Since then, the sector had started to take its head out of the water. Are you diving back today?

Luc Chatel: We experienced a year 2020 with first a collapse in the spring, then a rebound this summer, in particular thanks to the bonuses which were voted and which allowed an electroshock of resumption of the activity. We had a certain stabilization of the automotive market in September and October, that is to say at a level which was comparable to what it had been for ten years or so. Fairly correct. Order books that were quite correct. Then comes the second lockdown, which leads to a further collapse of the market.

Is it the closing of the dealerships that plagues you today?

Yes that’s it. If we look for ten days, that is to say since the announcement of the new confinement, we have a collapse in order intake of around 70%. And this has two consequences which are extremely detrimental: the first is on the activity of points of sale, of sales networks, which cannot last very long like this. The second is a consequence on the industry, that is to say that we cannot keep points of sale closed and automobile factories open for a long time. The automobile works in what is called “just in time” with a limited level of stocks and it is clear that if there is no recovery in the second half of November, we will gradually assist – again like in the spring – to auto plant closures.

The PSA plant in Rennes, for example, has just cut 500 temporary jobs. Is this the first in a long series?

The first level of production reduction is effectively the elimination of teams. With a level of activity as I described it just now, you cannot keep some factories in operation for long. PSA or Renault will have to – if the points of sale remain closed – shut down automobile factories, as they did in the spring. It is not easy to shut down an automobile plant for a while and it is even more difficult to restart it because there is the whole chain of subcontractors, all the coordination to manage. If factories are closed in the second half of November, they may not reopen before mid-January. So it has devastating consequences on our industry. I remind you that there are 400,000 jobs in the automotive industry in France […] We made a projection with the Union des Métiers de l’Industrie and it appears that the jobs threatened by this crisis are in the order of 60,000. This is considerable. Beyond that, there is know-how in the automotive industry. There are SMEs, forges, foundries and mechanics which are in danger today. So, indeed, this second confinement takes us completely head-on.

You saw several ministers last Friday, including Bruno Le Maire, the Minister of the Economy. You asked him, I suppose, to reopen the dealerships. What did he say to you?

First of all, I want to say that we are not in a frontal opposition. The government has supported the automotive sector with – among other things – future measures, that is to say, support for structuring projects for the electric vehicle, for batteries and therefore support for innovation to locate in France of the investments of the future. What is important is to understand that if we let our dealerships close, if we cannot sell vehicles, we will have to shut down the factories again and therefore stop the activity. We also want to highlight the fact that automotive points of sale are particularly secure in terms of health. We do not oppose commercial activity to health risk. First, we have proven over the past six months in all of our factories around the world that we have extremely high protocols. There was no cluster that was triggered either in factories or in automotive outlets. In a concession, there are approximately 40 to 50 square meters per customer, while the current gauge in businesses that are open is 4 square meters. We therefore have a much higher level of security.