France says local plants must stay open in Renault-Fiat merger

French Finance Minister Bruno Le Maire yesterday demanded that local plants remain open as part of a proposed merger between Italian-US auto giant Fiat Chrysler and France’s Renault. The French government, which owns a 15 per cent stake in Renault, has so far backed the idea of a merger, which would reshape the industry by forging the world’s third-largest automaker.

But Le Maire, speaking on RTL radio, asked Renault board chairman Jean-Dominique Senard for a guarantee “on the preservation of jobs and industrial sites in France” and a commitment that no factory 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.”

When Fiat presented Renault with the 50-50 merger proposal on Monday, it said the deal would not result in any production sites closing. Renault said it would study Fiat’s proposal “with interest” and after a board meeting over what it termed a “friendly” offer, the French carmaker said it would enter talks on a merger. Le Maire confirmed that the French state would not increase its 15-percent stake in Renault, so would hold around 7.5 percent in the new group after the 50-50 merger.

The CGT union at Renault has been wary of the plan, urging the French government to maintain a blocking minority after any deal. The proposal comes as Renault’s years-long partnership with Japanese automaker Nissan comes into question after the arrest and subsequent ouster of Carlos Ghosn, who had been Renault chief executive as well as Nissan chairman. Renault holds 43pc in Nissan, which in turn owns 15pc of its French partner.

Despite pledges on both sides to pursue the alliance, analysts say the tensions might be pushing Renault to explore alternatives. Italy’s government has been positive towards the plan, with outspoken deputy prime minister Matteo Salvini calling it a “brilliant deal”.