Economy

France is putting together an eight-billion aid package for the automotive industry

French President Macron supports its auto industry with billions.

AP Photo / Thibault Camus, pool

France wants to support its automotive industry with an aid package of more than eight billion euros. Of this, more than a billion euros will flow in order to get the demand slumping again due to the corona crisis. The head of state Emmanuel Macron announced on Tuesday after a visit to the supplier Valéo in the northern French town of Étaples.

“The global automotive industry is in a deep crisis,” summed up the 42-year-old. In return for the support, he wants to make the industry responsible for an ecological change. France was to become the “leading manufacturer nation” in Europe within five years for clean vehicles, he announced with regard to electric cars and hybrid vehicles that run on electricity and gasoline.

State incentives to buy new cars are increased. Help for the purchase of an electric car should rise to 7,000 euros – so far it has been 6,000 euros. Switching from old to new vehicles should also be rewarded. “There are 400,000 unsold vehicles,” said the head of state, who had previously met with industry and union representatives in Paris. Germany is also debating additional purchase premiums for cars.

France: 400,000 jobs depend on the automotive industry

Macron and the government in Paris are under considerable pressure to act. The industry employs around 400,000 people in the country. The French car market collapsed by almost 90 percent in April due to the Corona crisis and strict exit restrictions. A slow recovery is expected.

The head of state called for a national ruling to deal with what he said was the unprecedented crisis. To do this, manufacturers, suppliers, the state and employees would have to work together. High-quality production must be brought into the country. “We all have one goal: to fight for employment and industry in the automotive sector, everywhere in France.” Macron also referred to the planned EU reconstruction plan, which is to bring aid worth billions to the crisis-ridden industry.

In France, the manufacturer Renault is seriously worried – the group needs a state-guaranteed loan of five billion euros. Despite the problems of the Franco-German alliance, Renault will join forces for a joint battery cell production, as Macron announced. At the beginning of the year when he started a pilot production in Nersac in the south of France, he had spoken of an “Airbus of batteries”.

Renault presents billion dollar savings plan on Friday

The Europeans want to make themselves more independent from suppliers from Asia. A joint venture so far includes the Peugeot manufacturer PSA, its subsidiary Opel and Saft – this is a subsidiary of the French energy giant Total. According to earlier statements by Opel boss Michael Lohscheller, Germany’s largest battery cell plant will be built in Kaiserslautern. 2,000 jobs are to be created there.

Renault will present its billion-dollar savings plan this Friday, which the media is likely to include plant closings. Renault has not yet commented on this. Macron combined the green light for the planned billion dollar loan to the manufacturer with promises from Renault for two plants in northern France.

On Wednesday, top representatives of the Auto Alliance, which includes Renault and the Japanese manufacturers Nissan and Mitsubishi, want to comment on the future cooperation. The car alliance was in a severe crisis after the fall of top manager Carlos Ghosn. Ghosn was arrested in Japan in late 2018 for allegations and later fled to Lebanon under dubious circumstances. According to earlier figures, the alliance was behind the industry giants VW and Toyota with around ten million cars worldwide in 2019.

Nissan will cut 12,500 jobs

As previously announced in Japan, the three companies want to bury the idea of ​​a merger and instead focus on getting Allianz back on track. Nissan is also not doing well – the group will present its annual balance sheet on Thursday, which should look bleak.

Nissan recently suffered a quarterly loss for the first time in eleven years due to weak sales and announced last summer that it wanted to cut 12,500 of the approximately 140,000 jobs. According to an unconfirmed Japanese media report, Nissan is now considering cutting 20,000 jobs. The company has long contributed significantly to Renault’s profits. Renault was already in the red in 2019.

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