France To Renault: We Own You (Even If We Don't Really Own You)

Cammy Corrigan
by Cammy Corrigan
france to renault we own you even if we don t really own you

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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  • Tricky Dicky Tricky Dicky on Jan 16, 2010

    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.

  • 7 7 on Jan 16, 2010

    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

  • ToolGuy Government overreach. Park the Ford in your air-conditioned garage on a maintenance charger and this won't be a problem.Here's some (old) general background if you are interested.@ILO, there are 3 Fords, and Ford Pro™ is the one with the bright future 🙂
  • ToolGuy No harm no foul (no one died), business is business, yada yada. Why must everyone pick on dealers?-this post dedicated to Ruggles
  • Hydrocrust Parts
  • ToolGuy The vehicle development process which gave the world the Neon was so amazing (according to the automotive press) that it prompted Rick Wagoner to hire Bob Lutz.Didn't work 🙂
  • Lou_BC When my son was at the local Kia dealer they had a vehicle in for service. It was badly rusted. He refused to sign off on it as a tech. The owner being a grade A douchebag had the owner sign a release and let it go.