French government accused of 'spin' in Renault dispute

Government claims about a pledge to retain production of all domestic Clios in France are not backed up by Renault, writes BEN HALLin Paris

THE FRENCH government on Sunday tried to save face in its dispute with Renault, insisting it had secured a promise from the car maker that units of its future Clio small car destined for the domestic market would be made in France.

Ministers have leant heavily on Renault since it emerged earlier this week that it was considering centring production of the Clio 4, to be launched in 2013, at its lower-cost factory in Bursa, Turkey, rather than in France. Paris had insisted that a majority of Clio 4s were assembled in France, either at Renault’s Flins site, near Paris, or at another factory.

President Nicolas Sarkozy raised the pressure by summoning Carlos Ghosn, Renault chief executive, to the Élysée Palace on Saturday. But Sarkozy received only a pledge that part of future Clio production would be in France.

Claude Guéant, Sarkozy’s chief of staff, insisted on Sunday that the government – which has a 15 per cent stake in the company – had got everything it asked for.

“Carlos Ghosn said very clearly that the Clio 4s corresponding to the French market will be made in France, and the same for the Clio 3s,” Guéant told Europe 1 radio. “Renault has done everything that we asked. You can’t ask Renault to make cars for Turkey in France, which would mean not selling any more cars in Turkey.”

Guéant’s comments will trigger further alarm bells at the European Commission in Brussels, which expressed concerns last week that French pressure on Renault could constitute a breach of EU state-aid rules. The Commission said it was specifically concerned about government pressure on Renault to produce cars for the French market in France.

Renault said on Sunday that Clio production in France would depend on future capacity at the Flins factory, which will start producing the company’s Zoe electric car and batteries from 2011. “We have given no undertaking on either volumes or timescales,” the company said.

Renault last year built 180,000 Clios at Bursa and 125,000 at Flins. The company would build the Clio 4 at both sites, Ghosn said. Critics accuse the government of picking a fight with Renault and escalating it to prove to voters ahead of regional elections in March that they are committed to protecting French industry.

Fred Dijoux, leader of the CFDT union at Renault, said the government’s handling of the dispute amounted to a “masquerade of spin”.

– Financial Times Service