Daily Management Review

France Seeks Job Guarantee For Renault-Fiat Merger Support


France demands the preservation of its “industrial jobs and sites” in the Renault-FCA merger.

Source: flickr.com; (CC BY 2.0)
Source: flickr.com; (CC BY 2.0)
In return of France’s support towards the merger of auto-manufacturers, Renault and Fiat Chrysler, the country would seek “local jobs and other guarantees”, revealed French Finance Minister, whereby highlighting the “challenges facing the plan”.
On the other hand, the chairman of Renault, Jean-Dominique Senard, came to Japan to look into the tie up proposals, which could be seen as yet another “potential obstacle to the $35 billion-plus merger of equals”. Renault and Fiat are in talks to create “world’s third-biggest automaker” through merger.
As per Reuter’s reports:
“Shares in both companies jumped on Monday on news of a deal that would create an industry No.3 behind Japan’s Toyota and Germany’s Volkswagen and target 5 billion euros ($5.6 billion) a year in savings”.
However, analysts gave out caution signals as they companies have to deal with the challenges before winning over “powerful stakeholders” like “French and Italian governments”, Nissan and trade unions. The Finance Minister of France, Bruno Le Maire sees this as a “good opportunity for both Renault and the European car industry”.
However, Reuter informed that the minister also clarified that “the French government would seek four guarantees in exchange for backing a deal that would see its 15% stake in Renault reduced to 7.5% of the combined entity”.
In Le Maire’s words:
“The first: industrial jobs and industrial sites. I told the Renault chairman very clearly that it was the first of the guarantees I wanted from him in the opening of these negotiations. A guarantee on the preservation of industrial jobs and sites in France”.
Secondly, the minister demanded “well represented” place in the new company’s board. Moreover, Le Maire on his talks with the Japanese automaker about the tie up proposal said:
“I look at the reaction of Nissan president Mr Saikawa, and it’s a reaction that is open.”
Even though, analysts think Nissan might be reluctant to back the said tie up, its chief executive, Hiroto Saikawa was quoted by Japanese TV saying: “strengthening the alliance and constructive discussions are forward looking, and we are open to constructive discussions.”