Renault SA Chief Executive Officer Carlos Ghosn promised to maintain jobs at the company's Flins plant after meeting with President Nicolas Sarkozy and obtaining state aid to develop electric cars.
Renault will continue to produce its current Clio models at the site northwest of Paris and will add some production of its new Clio IV, Sarkozy said in a statement today. The French government will provide loans of 170 million euros ($244 million) to develop electric cars and batteries, he said.
Ghosn was summoned to meet Sarkozy after France's second- largest carmaker floated the idea of shifting production of the next Clio compact car to its plant in Bursa, Turkey. The suggestion came after France spent about 600 million euros to boost car sales and provided Renault with 3 billion euros of aid in the face of the worst recession since World War II.
"We haven't invested all this money supporting our carmakers just to see all the factories moved overseas," Sarkozy told lawmakers in the National Assembly Jan. 13. The French state is also Renault's biggest shareholder with a 15 percent stake.
Today's agreement suggests Renault will barely change its plans for Clio production, while allowing Sarkozy to say jobs will be kept in France. It also sidesteps concern raised by the European Commission, which cleared car incentive programs last year on the condition that governments avoid attaching strings that would favor the French auto industry over those of other countries.
European Union Competition Commissioner Neelie Kroes said yesterday that she'll ensure that France abides by the agreement under which the EU approved aid to Renault.
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