By on June 3, 2020

Renault — struggling, like all other automakers, from the body blow called COVID-19 — has secured a financial lifeline from an unsurprising source: the French government.

France, which holds a 15 percent stake in the automaker, signed off on a $5.6 billion rainy day fund for the company, guaranteeing 90 percent of the borrowed sum. That takes a fair bit off the heat off.

“This credit facility, which may be drawn in whole or in part, will help finance the group’s liquidity requirements within the context of an unprecedented crisis,” the automaker said in a statement.

Involved in the state-backed credit deal are five banks: BNP Paribas, Crédit Agricole, HSBC France, Natixis and Société Générale.

Last week, Renault released a transformation plan designed to save the automaker $2.25 billion over the next three years. Alliance partner Nissan also dropped its midterm plan the same week. Between them, Renault and Nissan, joined by alliance partner Mitsubishi, will divvy up the globe, focusing on each automaker’s strengths in the markets that make sense, and sharing to the maximum amount. Production and capacity will decrease in turn.

“Beyond this, the draft plan aims to lay the foundations for Groupe Renault’s long-term development,” the company stated. “In France, the Group would be organized around strategic business areas with a promising future: electric vehicles, LCVs, the circular economy and high value-added innovation.”

While the future might look bright to some members of Renault brass, it won’t be rosy for all who work under the corporate umbrella. The automaker expects to purge the company of 10,000 employees worldwide, with some 4,600 of them coming from its French complement.

[Image: meowKa/Shutterstock]

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