France Announces $10.4 Billion State Aid for Struggling Car Industry

Strategic Insights -

Nicolas Sarkozy, France's president, has taken bold action to protect the country's iconic car industry, announcing a state aid package worth almost $10.4 billion. The package includes loans of $7.8 billion to Renault and Peugeot Citroen, two of France's leading car manufacturers, as well as aid to car industry suppliers and financial services divisions. The state aid comes with strings attached, with the manufacturers committing to keep jobs and assembly lines in France, a move that has been welcomed by the industry but also raised concerns about protectionism.

Key Takeaways:

  • The state aid package includes loans of $7.8 billion to Renault and Peugeot Citroen over five years.
  • The manufacturers have committed to keeping jobs and assembly lines in France in exchange for the aid.
  • The package also includes aid to car industry suppliers, with the state doubling its aid to $782 million.
  • Renault Trucks, owned by AB Volvo of Sweden, will receive $650 million in state aid.
  • The car industry employs one in 10 French workers, making it a vital part of the country's economy.
  • Peugeot Citroen and Renault have committed to launching new models in each of their five French assembly plants and investing in energy-efficient technologies.

Statistics:

  • $10.4 billion: The total amount of state aid announced by Sarkozy for the French car industry.
  • $7.8 billion: The amount of loans to be provided to Renault and Peugeot Citroen over five years.
  • 140,000: The number of people directly employed by Renault and Peugeot Citroen in France.
  • $782 million: The amount of aid to be provided to car industry suppliers, double the previous amount.
  • $650 million: The amount of state aid to be received by Renault Trucks, owned by AB Volvo of Sweden.
  • 20,000: The number of workers to be cut worldwide by Nissan, Renault's international partner.
  • 2009: The year in which the global financial crisis has seen car sales tumble, leading to significant job losses in the industry.

Sources:

  • Aljazeera.net 2003 - 2009 Provided by Syndigate.info an Albawaba.com company