Jobs have to be secured in the Renault-Fiat merger, says French finance minister – The Economic Journal


Fiat Chrysler Automobiles (FCA) delivered a 50/50 merger plan to Renault this Monday, a document the French company said it would review "with interest." However, as the French government holds 15.7% of the Renault group, it has now come forward on this business junction.

French Finance Minister Bruno Le Maire wants the company to take into account the works at the factories and to make other assurances so that the government supports the agreement between the manufacturers.

Bruno Le Maire informed the radio "RTL" on Tuesday that the proposal was a good opportunity for the two brands, namely for Fiat-Chrysler, since it has been accumulating vehicles have no demand of the international market. The finance minister in France stressed that the government, in addition to seeking the necessary guarantees to make the business work, wants to replace the percentage it owns at Renault to regulate 7.5% of the combined entity.

"First: jobs and locations. I have already spoken with the Renault president and I was very clear when he said what the main guarantees he should guarantee in the beginning of these negotiations, "said Bruno Le Maire, specifying that work and its factories in France should continue.

The minister explained that the deal has to be developed "following the alliance structure between Renault and Nissan," ensuring that he wants to be a leader in the development of batteries for electric vehicles. Bruno Le Maire also assured that the president of Nissan has "an open reaction" regarding the merger.

A source at the Reuters news agency said Renault and FCA have made commitments to maintaining industrial and local jobs, leaving room for administrative layoffs and engineers as they think of reducing the size of the factory.

Matteo Salvini, deputy prime minister of Italy, has also reacted to the news of a possible merger. The official said that Roma could also have a stake in the combined company, which will balance the participation of France.

Renault's chairman Jean-Dominique Senard has traveled to Japan to speak with Nissan's partners, because according to the same agency, they may be a barrier to the merger, which is expected to have a market value of 35 billion dollars (about 31.3 billion euros).

If the merger were to materialize, the Renault-FCA business would create the third largest company in the automotive industry, ranking behind Toyota and Volkswagen, and could achieve savings of five billion euros per year. After Renault announced that it would review the proposal, its shares rose 12%, while Fiat rose 8% in the United States.



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