France Bailing Out Its Auto Industry
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In France, troubled carmakers are banking on a bailout. The French government says it is willing to make massive investments to save its two big auto manufacturers, Renault and Peugeot. Eleanor Beardsley reports.
ELEANOR BEARDSLEY: Sitting beside Carlos Ghosn, the CEO of Renault-Nissan, French Prime Minister Francois Fillon signed a deal for nearly $8 billion of state aid to keep the French car industry afloat in the current financial storm.
Prime Minister FRANCOIS FILLON: (French spoken)
BEARDSLEY: Our efforts in favor of manufacturers will be massive, said Fillon. We're talking about sums in the order of five or six billion euros, but there is no question of helping carmakers that decide to close plants on French soil.
In sharp contrast to the U.S. approach, the French government is insisting that its carmakers protect jobs. Both Renault and Peugeot-Citroen have come under fire recently for setting up plants in Eastern Europe. The car industry employs 10 percent of the French workforce, and President Nicolas Sarkozy has vowed not to let the nation's key industries fall victim to the current crisis. But tumbling sales have forced the two automobile icons to let their factories run idle for weeks at a time and slash thousands of jobs.
(Soundbite of protest)
BEARDSLEY: Job cuts in some areas have been met with massive protests by unions. Before digging deep into its pockets, the French government tried to help the nation's automakers get rid of unsold stock by offering consumers a 1,000 euro bonus for buying an energy-efficient new car, but it wasn't enough in the face of the growing crisis. Renault says it sees no problem with what the government is asking, but Peugeot, which is deemed to be in better shape, says it doesn't understand why it should have to issue a guarantee to protect jobs in exchange for financial aid. For NPR News, I'm Eleanor Beardsley in Paris.