France: Production of the Renault Clio IV.
Description
After a meeting with Renault executives, the French government announced on 16 January 2010 that the French carmaker will produce part of the output of its model Clio IV (expected in 2013) in the French plant located at Flins. Prior to the statement, press articles had indicated plans of Renault to concentrate production at its plant in Bursa, Turkey. The potential job losses associated with the restructuring had promted French Industry Minister Christian Estrosi and President Nicolas Sarkozy to intervene at the highest level and excert pressure using the 15.01 percent stake the French state currently holds in the firm. While it is beyond the Global Trade Alert to evaluate whether such an intervention is compatible with shareholder rights, the following paragraphs document the trade-related statements made by Mr Estrosi as well as Mr Sarkozy.
To prepare the meeting between Mr Sarkozy and Renault executives, French Industry Minister Christian Estrosi had met the director general of Renault, Mr Patrick Pelata, on 12 January 2010. After the meeting, the Ministry of Economy, Industry and Employment released a statement specifying the halt and reversal of international oustourcing to be the content of the talk. According to the minister, assembling a car in France, but importing two thirds of its parts from abroad is "hidden outsourcing". Mr Estrosi went on to call Renault to engage more thouroughly with French suppliers and sub-contractors in its future activities at Flins.
In a parliamentary hearing later that day, Minister Estrosi explained that the French government "will not allow the Clio IV to be produced in Turkey. A Renault to be sold in France will be produced in France." The next day, 13 January 2010, Mr Estrosi elaborated in a further parliamentary session that he had reminded the executives of Renault of the state assistance granted through direct aid and the car scrappage scheme. He now expected "significant action" of the French car maker. To Mr Estrosi, "it is not acceptable, to learn that a new model will be produced in Turkey without embedding this into the industrial strategy put forth by the government."
The formula that cars to be sold in France should be produced locally has been repeated by Mr Sarkozy in a talk show aired on 25 January 2010 on the French television channel TF1. In addition, Mr Sarkozy explained that the discussion was not about prohibiting the outsourcing of production in general. But, the French president insisted, "when we decided to help Renault, this was not to allow continous outsourcing." Regarding the share of imported car parts, Mr Sarkozy went on stating "I demand this proportion to be reversed; two thirds of Renault's sub-contractors shall be French."
On 28 January 2010, Renault's CEO Carlos Ghosn apparently agreed to the demands of the government. In an interview with the French television channel France 24, Mr Ghosn stated that "at least the amount of Clios sold in France will be produced in France."
The comments of Mr Estrosi and Mr Sarkozy raised concerns from EU competition commissioner Neelie Kroes. Upon request, the French government submitted a letter to the competition commission, stating that assistance to French car makers had not been tied to local production.
Any Evidence-Based Deliberation:
| Question | Result |
|---|---|
| Is there anything in the public record to suggest that evidence of the effectiveness of the proposed measure was considered during official deliberations? | |
| Is there any evidence that alternatives to the proposed measure were considered? | |
| Is there anything in the public record that suggests that empirical evidence informed the comparison across the alternatives available to government? | |
| Was such evidence identified? | |
| Is such evidence publicly available? | |
| Did the official decision-maker in question provide an explanation as to why a chosen measure was favoured over alternatives? | |
| Is there any evidence to suggest that potentially affected trading partners were consulted before the measures were taken? | |
| Is there any evidence that safeguards have been put in place to ensure that implementation of the initiative is transparent and non-discriminatory? | |
| Did the government state its intention to review the measure within one year of implementation? |
Date Discovered:
Implemented: No
Date of inception:
GTA Evaluation: Amber
Source:
Agence Participations de l'Etat. (2010). Portefeuille de participations cotées de l'Etat. Available at http://www.ape.minefe.gouv.fr/sections/colonne_de_droite/access_to_the_f...
Financial Times. (16 January 2010). French president pressures Renault, gets no pledge. Available at http://www.ft.com/cms/s/0/7b085906-02d5-11df-86b3-00144feabdc0.html?ncli...
Financial Times. (26 January 2010). Paris says car aid not tied to production. Available at http://www.ft.com/cms/s/b12d3912-0aa4-11df-b35f-00144feabdc0.html
France 24. (28 January 2010). Renault produira en France les Clio qui y sont vendues, assure Ghosn sur France 24 [Video]. Available at http://www.france24.com/fr/20100128-industrie-automobile-pdg-ghosn-renau...
Le Monde. (15 January 2010). Nicolas Sarkozy défend sa politique sur TF1 [Video]. Available at http://www.lemonde.fr/societe/article/2010/01/25/les-points-cle-de-l-int...
Ministry of Economy, Industry and Employment. (12 January 2010). Lutter fermement contre toutes formes de délocalisation. Available at http://www.minefe.gouv.fr/discours-presse/discours-communiques_finances....
National Assembly of France. (12 January 2010). Première séance du mardi 12 janvier 2010. Available at http://www.assemblee-nationale.fr/13/cri/2009-2010/20100097.asp
National Assembly of France. (13 January 2010). Première séance du mercredi 13 janvier 2010. Available at http://www.assemblee-nationale.fr/13/cri/2009-2010/20100099.asp
Presidency of the Republic. (16 January 2010). Entretien de M. le Président avec M. Carlos GHOSN, Président directeur général de Renault et de Nissan. Available at http://www.elysee.fr/documents/index.php?mode=view&lang=fr&cat_id=8&pres...
TF1. (25 January 2010). L'interview intégrale de Nicolas Sarkozy au 20h [Video]. Available at http://videos.tf1.fr/jt-20h/l-interview-integrale-de-nicolas-sarkozy-au-...
Government Response:
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