Renault receives state guarantee and checks plant closings

The carmaker was already in trouble before coronavirus crisis. Interim chief Clotilde Delbos now wants to cut costs.

Renault Koleos – (photo by Renault)

According to French press reports, the automaker Renault has secured a state-guaranteed loan of five billion euros. This should be announced on Wednesday. The aid will ensure the solvency of the company, which was already in considerable trouble before the corona crisis : ex-boss Carlos Ghosn had fueled production without paying attention to the costs.

Interim chief Clotilde Delbos wants this to be permanently reduced by two billion euros. There are no taboos on the savings. Delbos already announced this at the annual press conference in February. The plan for this is to be presented next week.

According to the satirical weekly “Le Canard Enchainé”, four plants in France are to be closed or downsized. It is Choisy-le-Roi in the south of Paris, a plant in Brittany and the plant in Dieppe in Normandy. 300 to 400 employees would be affected.

The Alpine sports car, which has been reissued since 2017, is manufactured in Dieppe. The incision is significantly larger in Flins west of Paris, where 2,600 employees work. So far, 160,000 cars have been manufactured there: the Clio, the Nissan Micra and the electric car Zoé.

According to the Canard report, car manufacturing is being withdrawn entirely from Flins. The new Clio model had already been moved to other factories abroad. The Zoé and Micra are also said to be distributed to other locations.

The granting of the state guarantee does not seem to depend on the avoidance of plant closures. The only condition is to refrain from paying a dividend. The French Ministry of Economic Affairs did not want to comment on the question and referred to the company, which has not yet communicated.

In the first quarter of 2020, the global car sales has Renault to remove 26 percent. Sales fell by 19 percent, more than the competitor PSA (Peugeot, Citroën, Opel), which lost almost 16 percent.

Renault is currently significantly smaller than its competitor: the brand with the diamond achieved sales of ten billion euros in the first quarter, the manufacturer with the lion 15 billion euros. A few years ago, Renault was clearly ahead of PSA. The French state still has a 15 percent stake in Renault.

Author: Nabeel K

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