Saturday 17 August 2019

France wants jobs pledge in Renault-Fiat merger

Blessing: French finance minister Bruno Le Maire said the plan was a good opportunity for both Renault and the European car industry. Photo: REUTERS
Blessing: French finance minister Bruno Le Maire said the plan was a good opportunity for both Renault and the European car industry. Photo: REUTERS

Sudip Kar-Gupta

France will seek protection of local jobs and other guarantees in exchange for supporting a merger between carmakers Renault and Fiat Chrysler, its finance minister said yesterday, underscoring the challenges facing the plan.

Renault chairman Jean-Dominique Senard arrived in Japan to discuss the proposed tie-up with the French company's existing partner Nissan - another potential obstacle to the $35bn (€3.13bn) merger of equals.

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Renault and Italian-American rival Fiat Chrysler Automobiles (FCA) are in talks to tackle the costs of far-reaching technological and regulatory changes by creating the world's third-biggest carmaker.

Nissan found out about Renault's merger talks with Fiat Chrysler just days before they became public, four sources told Reuters, stoking fears at the Japanese carmaker that a deal could further weaken its position in a 20-year alliance with Renault.

A deal between Renault and FCA would create a player ranked behind only Japan's Toyota and Germany's Volkswagen and target €5bn a year in savings.

Analysts, however, have warned that the companies face a challenge to win over powerful stakeholders ranging from the French and Italian governments, to trade unions and Nissan.

French finance minister Bruno Le Maire said the plan was a good opportunity for both Renault and the European car industry, which has been struggling for years with over-capacity and subdued demand.

Mr Le Maire added that the French government would seek four guarantees in exchange for backing a deal that would see its 15pc stake in Renault reduced to 7.5pc of the combined entity.

"The first: industrial jobs and industrial sites. I told the Renault chairman very clearly that it was the first of the guarantees I wanted from him in the opening of these negotiations. A guarantee on the preservation of industrial jobs and sites in France," said Mr Le Maire.

The minister also said France wanted to be well represented on the board of the new company, for it to be a leader in developing electric batteries, and for the deal to take place "within the framework of the alliance between Renault and Nissan".

Mr Le Maire said he had spoken to the Japanese personally about the proposed tie up.

On Monday, Italian Deputy Prime Minister Matteo Salvini said Rome might need to take a stake in the combined company, balancing France's shareholding.

Reuters

Irish Independent

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