Business Europe comes to the rescue of Renault with aid...

Europe comes to the rescue of Renault with aid of € 5 billion in the face of harsh cuts

France is preparing a package of measures to shore up its auto industry after the devastation caused by the pandemic halt, together with an emergency loan approved by the European Commission of € 5 billion to launch Renault.

The diamond company has announced a plan to reduce spending by 2 billion, which could include the closure of factories and the elimination of old models, according to the AFP agency. At the moment it seems that the Spanish factories of Renault are getting rid of the possible closings.

A lifeguard after the breakdown of the pandemic

France rescues the signature of the rhombus. The European Executive has authorized a loan of 5,000 million euros for Renault – which belongs to 15% of the French State – which was already dragging its own internal crisis after the Ghosn scandal.

Renault recorded losses of more than € 5 billion during the first quarter of 2020; a 19.2% drop in its turnover compared to the same period of the previous year.

Meanwhile, France will announce in a few days its plan to boost car buying and the transition to a more sustainable model. “That means supporting the purchase of clean vehicles. We need to use this crisis as a lever to accelerate the transition of our environment and encourage the French to buy cars that are still too expensive today,” said the Minister of Economy and Finance of France, Bruno Le Maire, on France Info radio.

Cut plan. On May 27, the Nissan-Renault-Mitsubishi alliance will announce a joint medium-term plan to face the crisis in the sector and probably reorganize the production system in the alliance, although each will make its own plan public.

This plan would imply reducing production capacity by 20%, which could deal the final blow to the difficult situation of the Nissan factory in the Barcelona Free Trade Zone. For the moment, the Generalitat maintains the hope that Nissan will continue in Barcelona, ​​although there is nothing certain on the table.

Free Zone

Possible closure of factories. His cut plan will include cutting spending by € 2bn by 2022, which could result in factories closing on national soil. According to Les Echos, the Alpine in Dieppe (Normandy), the Caudan foundry, in (the Brittany region) and the Choisy-le Roi (on the outskirts of Paris) are in the spotlight.

The uncertain outlook will also affect its Slovenian factory, where Renault plans to cut around 400 of the 3,200 jobs, according to Automotive News.

Renault has four factories in Spain: one in Palencia, two in Valladolid and one in Seville. In Spain, more than 10% of the Group’s annual production of vehicles, more than 33% of gearboxes and almost 40% of engines are manufactured.

New era with Luca de Meo. On July 1 Luca de Meo will take over as CEO at Renault; by then the French manufacturer must present its comeback strategy, to overcome a disastrous closing of 2019, with junk bonus included.

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