France to sign off on €5b aid for Renault after jobs pledge

The French government is set to sign off on a five -billion-euro (5.6-billion-dollar) loan guarantee to help carmaker Renault overcome the COVID-19 crisis, the Economy Ministry said on Tuesday.

The development came after Renault management and unions agreed to start discussions on preserving jobs at a factory at Maubeuge in northern France affected by a cost-cutting plan announced on Friday.

Renault, which posted an overall net loss of 141 million euros for 2019, aims to cut costs by 2.2 billion euros over the next three years.

Chief executive Clotilde Delbos said on Friday that the plan would affect 15,000 jobs worldwide and nearly 4,600 in France.

But President Emmanuel Macron earlier in the week warned there would have to be an agreement about jobs at the Maubeuge plant and a nearby factory in Douai before the government, which with a 15.01-per-cent stake is Renault’s biggest shareholder, would sign off on the loan guarantee.

The ministry said talks between management, unions and regional authorities on the future of the Maubeuge site would begin next week.

Renault has been going through a turbulent period since its then boss, Carlos Ghosn, was arrested in Japan in late 2018 on charges of financial misconduct at allied firm Nissan, which he also headed.

Ghosn, who denies any wrongdoing, subsequently fled to Lebanon.

Nissan last week posted a net annual loss of 671.2 billion yen (6.2 billion dollars) due to slumping sales, restructuring costs and the effects of the coronavirus pandemic.

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