By on January 15, 2010
Can you feel the love? (courtesy:lepoint.fr)

Money Control reports that the French government threatened to increase its stake in Renault from 15.01% to 20%. Not because it believes in the company and its products (would you trust a Renault Megane over a Honda Civic or Toyota Auris?), but to further exert control over Renault. Why would it want to do that? Well, that could probably have something to do with the French government’s invite to Carlos Ghosn for a little “sitdown” over the rumours that Renault may produce its new generation of Clio in Turkey, rather than its plant in Flins, France, where the current generation is built.

Christian Estrosi, France’s Interior Minister, told Reuters that there’s a 50-50 chance that the French state will raise its stake in Renault to as much as 20%. Like before, Monsieur Estrosi did not leave any ambivalence in his words. “We are considering this. What is certain is that we are looking for a way for them (Renault) to understand that the state with a stake of 15 percent is a state that has influence,” he said. France is Renault’s biggest shareholder, at 15.01%, just ahead of Nissan, who own 15%.

“We can do this by staying at 15%. Maybe going to 17, 18 or 20 is a psychological way to make them understand that we don’t intend to just let the industrial auto strategy of France run its course without reacting,” said Estrossi. To reinforce the point, he’s just announced that France will not actually increase its stake in Renault. Because it doesn’t need to.

“Whether we have 15 per cent of the capital, or whether we have 20 per cent, whether we have one director or whether we have six,” Estrosi told the Financial Times today, “do you think that is where things are decided or do you think it is in this place [the finance ministry] or at the Elysée?” No prizes for guessing the right answer.

In fairness, the French Interior Minister has showed he “reasonable” side, “What we are asking of Renault is not to close a production chain in Turkey, to ensure that the Clio 4 that is destined to be sold in France is produced in the country,” said Estrosi. He then added that it would be acceptable to make the vehicle in Turkey for that market.

Neelie Kroes, European Competition Comissioner, has sought explanations from the French government about its actions, in addition to the French pledge to grant public money to French car makers in return for keeping jobs domestically. “Our concern is about certain statements by the industry minister, Christian Estrosi, who that if a French car is sold in France, it should have been made in France,” said a spokesperson for Kroes.

Mind you, if you weren’t clear on Christian Estrosi’s position, he further clarified it by saying that the French government’s position towards Renault reflects a push by the authorities to strike (not that kind) a balance between interventionist policies and allowing companies to act freely. Oh, and he wants to protect French car parts suppliers by ensuring that French automakers source more parts domestically. Meanwhile, Bosch announced the closure of their starter motor factory in Wales, UK, which will include the loss of 900 jobs. Maybe we, the UK, could benefit from being a little more French….?

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16 Comments on “France To Renault: We Own You (Even If We Don’t Really Own You)...”


  • avatar
    sharp

    You definitely should also tag this article as socialism.

    • 0 avatar
      7

      You definitely should also tag your comment as stupidity. France is ruled by a right wing party and socialism is really something else.

    • 0 avatar
      psarhjinian

      France is ruled by a right wing party and socialism is really something else.
       
      Yes.  And then again, no.  For one thing, what is defined as “right” or “left” depends very much on where you live.  By American standards, Sarkozy is practically a  communist.
       
      For another, we need to make a distinction between globalist, authoritarian lefties and the more individualist ones.  Again, Americans, not having any experience with leftism in general, have real trouble with this distinction, so a practical example is often in order.  To whit, can you tell the difference between:
      * A socialist like Mahatma Ghandi
      * A socialist like Mao Zedong.
      Hint, it’s like the difference between Milton Friedman and Benito Mussolini.
       
      Ok, got that out of my system.  What the French government is doing is fairly left-of-centre in pure policy terms.  There’s nothing really wrong with this: they’re a stakeholder in Renault, and they have a vested interest in doing what would benefit their own shareholders (eg, the citizens of France).  I’d have liked to see the American and Canadian governments do the same (eg, grow a pair) and slap a little sense into General Motors.

  • avatar
    midelectric

    Shareholders demanding a say in how their company is run is quite capitalist, don’t you think?  It would be foolish for the French government to acquiesce to ponying up the dole to support laid-off workers of a company they have a significant share in.

  • avatar
    Garak

    Global free market capitalism has run its course in Europe, countries are finally starting to take steps against moving production to third world nations. Expect to see “CO2 based” taxes on long-distance imports and such. France is still doing this in the civilized way.

  • avatar
    FromBrazil

    Mr Corrigan:

    Here we go again, the famous Jeremy Clarkson conundrum (and since you’re European you should understand): We should all just buy a Golf and be done w/ it.

    So, as a quick answer to your question, I would certainly pick a Mégane over a Civic or Corolla (Auris), as I would a Twingo or Clio over the Yaris, or even a Laguna over a Camry. I’d get a certain je ne sais qoi (sp??) and savoir vivre, not to mention design, performance and grace. So, there you go. Or we have all become sheep following the leader?

    As to the EU “looking into” what France is doing, hold on, let me cough and smile a little, this has been more than sufficiently covered in other posts, hasn’t it?

    • 0 avatar
      Cammy Corrigan

      So what you’re saying is you’d prefer to buy a car which has appalling build quality and even worse reliability, because you want a certain “Je ne sais quoi”? Wow! When I’m spending £15K+ I prefer my head to takeover, not an abstract concept.
       
      And that’s MISS Corrigan to you!

    • 0 avatar
      midelectric

      If the build quality is in fact appalling, moving assembly to Turkey isn’t going to solve anything.  Can you name any transplant that has exceeded the quality of products built by factories in the home country?  Maybe matched in the case of US Honda and Toyota plants, but very unlikely exceeded.

    • 0 avatar
      Cammy Corrigan

      Turkey build the Ford Transits which are making their way to the United States and they’re considered to be reliable.
      The Peugeot 206 was considered to be one of the most reliable Peugeots made and that was made in the UK.
      Lexus gave a massive vote of confidence in the Canadian plant by letting them build the RX.

    • 0 avatar
      FromBrazil

      Please, please, I didn’t mean any offence Miss Corrigan. By calling you the way I did (most unfortunate mistake) I was trying to be respectful!!!

      So anyway. I’ve asked myself this question many times over the years. How does an auto journalist know about build quality. Sincerely it phantoms me.  Everytime there’s a new VW launch down here I read about “build quality”. Yet I sit and drive their cars and I see, feel, hear, smell nothing superior to their competitors (quite the opposite a number of times – not to mention the horrific peoblems they’ve had w/ the new Gol, VW Brazil’s most important launcg in decades). Honda ditto. Toyota not so much, interestingly. Of course I’m referring to my experiences down here, in Brazil.

      Well, and just as a counter point. I consider (for the most part) Citröen as inferior to Renault. Yet you have your Euro-correspondent Martin Schwoerer who loves them. Am I to call him crazy? Different strokes for different folks.

      Ah and that French car sensation as you glide down the road…Can’t be beat! Now that’s what I call je ne sais quoi!

      BTW, always read and enjoy your posts Miss Corrigan! Keep up the good work!

    • 0 avatar
      Syke

      Miss Corrigan,
       
      Yes, I will happily own an automobile that is a constant litany of little niggles that have to be constantly taken care of, if that car hits me properly in the gut.  My 23 year old Porsche 924S is a prime example of just such a car – mechanically reliable, but there’s lots of little electrical tweaks that have to be done, most likely due to its age.
       
      No doubt, for the same money, I could have bought a completely reliable Toyota Corolla that would have soldiered on for the next 50K or so with nothing more than the every 5k oil change.  I’ve driven those cars.  I’d rather burn my driver’s license than own one.

  • avatar
    FromBrazil

    And also, I’m Latin. So yes my heart does take over my mind, many times. And I think I’m a happier man for it. (Wink and LOL!)

    I recall a very old top gear (1997 or thereabouts). It pitted the then new Audi 4, Mercedes C, BMW 3 and Alfa Romeo 156 (then new and breathtakingly beautiful).

    Well, as far as I recollect, it came as a shock to the producers, but the Audi actually beat the 3 by a hair. As the program was drawing to a close though, the presenter made it a point to point out that even though the Alfa had been beat by almost all objective measures (and the words were more or less as follows and as best as memory serves); ” If you live your life by music and poetry, by wine and beauty, get the Alfa. It gratifies the soul in a way the other cars can’t equal”.

    So, yes, when choosing a car I live by that. 2 extra trips a year to the mechanic? I don’t care. Iget 363 better days because of it.

    Thanks for the attention.

  • avatar
    Telegraph Road

    The real reason Ghosn and Sarkozy have a photo-op together: they are the same height.

  • avatar
    TonyJZX

    ghosn has that death stare going on
    france is socialist anyway so this is nothing new

  • avatar
    Tricky Dicky

    There’s no issue with getting quality from a factory in Turkey as opposed to anywhere else. Turkish workers are very proud of what they do and are really diligent in a way that would put many workforces in old europe to shame.
    But that isn’t the point of this story. It’s about whether or not the French Gov’t will allow Renault to pursue what the management believe to be in the best long term strategic interest of the company – i.e. making a small car in a plant where workers command lower wages than they do in Flins (France). And this IS socialism and somehow, it seems pretty progressive to me. If you consider all the problems that the UK economy has from it’s “laissez-faire” approach to industry and the fact that Sarkozy is determined that France will still have an auto industry in the future, I say fair play to them.
    Germany has shown that it is possible to build a lasting industry. And I’m pleased that the French aspire to something more than unemployment or working in telephone call centres.

  • avatar
    7

    Hmmm, excuse me Miss, but Mr Estrosi (aka the Motodidact (1)) is the Minister of Industry. The minister of Interior is Brice Hortefeux.

    And on the whole subject, it’s only a smokescreen. His own government is the one that reduced the share the state had in Renault. But as regional elections are due in three months…

    (1) A pun on Motorcycle and Autodidact as he has been a professional racer and is renown for his lack of diplomas


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