Renault-Fiat deal must protect French jobs, says finance minister

Paris

A MERGER between Fiat Chrysler Automobiles NV and Renault SA must include guarantees on French jobs and factories and fit with an existing Franco-Japanese car partnership, Finance Minister Bruno Le Maire said.

The government wants safeguards on maintaining industrial jobs in France and "zero" site closures, he said on RTL radio on Tuesday. Renault chairman Jean-Dominique Senard, who is leading the merger talks, "has to come back to me on the guarantees he has obtained from Fiat on Renault's footprint in France."

Fiat proposed on Monday to merge with Renault to create the world's third-biggest carmaker. The French company's board agreed to study what it called a "friendly" proposal, structured as a 50-50 ownership through a Dutch holding company.

In his first public comments on the deal, Mr Le Maire said it represented a "great opportunity" for Renault and the European car industry. Yet he laid out four demands that need to be fulfilled before what he termed the merger of equals could be approved. The government is Renault's most powerful shareholder and has representatives on the board.

In addition to providing job guarantees and including Renault's partners, Nissan Motor Co and Mitsubishi Motors Corp, in the equation, Mr Le Maire said he wants assurances on who will head the new entity "so that French interests will be well preserved."

People familiar with the matter have said the plan is for Fiat chairman John Elkann to stay in that role while Mr Senard would become CEO.

In defending the deal, the French government is opening itself up to criticism from unions and the political opposition for giving up a degree of control over Renault. The state's holding will be halved to 7.5 per cent under the plan, a significant decline in light of France's history of intervening in companies in which it holds significant stakes.

Jobs will be saved through investment in new technology such as electric and self-driving cars, rather than through government equity holdings, Mr Le Maire said. In Italy, deputy prime minister Matteo Salvini has also indicated support for the deal, so long as jobs are safeguarded.

One big question is how a combined Fiat-Renault would mesh with the French carmaker's alliance with Nissan and Mitsubishi. Relations between the partners were rocked by the November arrest in Japan of former alliance chairman Carlos Ghosn on allegations of financial crimes - charges he denies.

Mr Le Maire has been pushing for closer ties within the alliance and said Senard will hold "face-to-face" meetings with Nissan CEO Hiroto Saikawa in coming days to discuss the Fiat plan.

"I want this combination to be done within the framework of Renault and Nissan," Mr Le Maire said, adding that he informed his Japanese counterparts of the Fiat proposal on Friday after he was told about it.

"We know relations are tense. We have undertaken to try to appease them with Senard."

France is also insisting Fiat and Renault participate in a European project to develop batteries for electric vehicles rather than order them from China or South Korea, the minister said. BLOOMBERG

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