France says planned Renault-Fiat merger must protect jobs

Finance minister seeks guarantee no factories will close before any deal is agreed

France’s finance minister has demanded that no factories in the country be closed down and that jobs for French workers be preserved if a proposed merger between Renault and Fiat Chrysler is to goes ahead.

Fiat Chrysler Automobiles (FCA) on Monday revealed a planned merger of equals between the two companies, which would create the third-largest global car manufacturer, behind Germany’s Volkswagen and Japan’s Toyota. Renault said it would study the “friendly proposal”.

The French government owns 15% of Renault’s shares, meaning the €32.6bn (£28.8bn) merger hinges on its approval.

FCA said it expected €5bn (£4.4bn) in annual cost savings from the proposed tie-up and they would be achieved by sharing the huge investment burden in autonomous driving and electrification technology – rather than politically painful job losses.

But the prediction has stirred concern among French officials that some of those savings could put French jobs and facilities in the crosshairs.

France’s finance minister, Bruno Le Maire, speaking on RTL radio, asked the Renault chair, Jean-Dominique Senard, for a guarantee “on the preservation of jobs and industrial sites in France” and a commitment that no factory would be closed in the country.

“This is the first guarantee that I requested from Mr Senard on the opening of these negotiations with Fiat,” Le Maire said. “Since I have agreed to the opening of negotiations, it is up to him to come back to me in the coming days on the guarantees he was able to obtain from Fiat.”

He described the merger as “a great opportunity for Renault and the European automotive industry” but added that he had requested assurances that French interests would be “well represented”.

Matteo Salvini, Italy’s deputy prime minister and the leader of the far-right League, has welcomed the proposed deal and said Rome should take a stake in the combined company if required.

Senard, a former boss of the tyre firm Michelin, was drafted in to replace Carlos Ghosn in January after the former Renault-Nissan alliance chief’s arrest in Japan on charges of misreporting income.

Senard now faces the delicate task of pulling off a merger between companies representing interests from multiple countries.

FCA is controlled by John Elkann, a New-York-born scion of the Italian Agnelli family, which also owns Serie A champions Juventus FC as well as 47% of the Economist Group.

It was established in 2014 via a merger with America’s Chrysler, creating a multinational firm. As well as Fiat and Chrysler its marques include Alfa Romeo, Jeep, Maserati and Dodge. Ferrari was spun off into a separate company in 2016.

Renault, which also owns the Dacia and Lada brands, is also part of an international powerhouse thanks to its alliance with Japan’s Nissan. But in recent months the partnership has been strained by the ousting of Ghosn.

He has accused Nissan executives of conspiring to have him arrested over unfounded fears about his plans for the Japanese carmaker, saying he had been unfairly portrayed as a dictator by “backstabbing” former colleagues.

Ghosn was recently granted bail but will not be allowed to meet his wife, Carole, without permission from the Tokyo district court.

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Bail was set at 500m yen ($4.5m), according to the court, which approved Ghosn’s application after he was arrested for a fourth time over allegations that he misused company funds.

Automotive analysts have said combining the companies, which employ thousands of people in multiple countries, would be a complex undertaking.

Arndt Ellinghorst, an Evercore ISI analyst, said: “We now have the French, the Italians, the Japanese and the Americans needing to find consensus on the board of a Dutch company, where the French state stands to lose its special status. This requires quite a bit of creativity.”


Jasper Jolly and Rob Davies

The GuardianTramp

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