Renault seeks to reassure Sarkozy on French production

(PARIS) - Renault chief Carlos Ghosn assured French President Nicolas Sarkozy on Saturday that production of the new Clio line would not be entirely transferred to Turkey as the government had feared.

France's number two carmaker, Renault, has come under heavy pressure from the government to keep jobs at home following press reports about a planned shift in Clio production from Flins outside Paris to Bursa in Turkey from 2013.

After a meeting of around an hour, Ghosn told Sarkozy that Renault would keep using the Flins factory, and gave assurances that "part of the Clio IV production" there was guaranteed, Sarkozy's office said in a statement.

Ghosn said that "Renault will keep the site's use and activity, continuing production there of combustion vehicles while developing the production of electric vehicle," Sarkozy's office said.

The government will also make a 100-million-euro loan at a favourable rate to help turn Flins into "a major European site for electric vehicle production" and make a 70-million-euro loan to build a battery factory at the site.

The Elysee statement made no mention of what Renault work might be done in Turkey or the exact breakdown.

Renault had until now said no decision had been taken on the possible move, while stressing that most of its production was already done outside of France.

The French state is Renault's biggest shareholder, with a 15-percent stake.

"We're not giving all that money to support the auto sector so that all our factories can leave to go abroad," Sarkozy told members of parliament at an Elysee meeting on Wednesday.

"I strongly contest the idea that these big companies, just because they are global, no longer have a nationality."

France's minister for Europe, Pierre Lellouche, has rejected suggestions that the pressure on Renault not to move production abroad could violate the terms of a French deal last year to support the car industry.

EU Competition Commissioner Neelie Kroes said in Brussels that there was an "apparent contradiction" between the French government's latest move and promises it made last year that subsidised loans to national car producers would not affect their freedom to move their operations.

French government measures taken last year to support the auto sector in the economic downturn included generous loans to carmakers on condition that they keep production and jobs in France.