Monday December 15, 01:04 PM
Sarkozy to hold aid talks with French car executives
PARIS (AFP) - President Nicolas Sarkozy was to meet French car industry executives on Monday to discuss measures to shore up the sector, among the hardest-hit by the global economic slowdown.
Facing a collapse in car sales, Renault (Paris: FR0000131906 - news) , PSA Peugeot Citroen and their suppliers have run into trouble, and industry leaders warn prospects for the coming year or two are bleak.
"We still haven't hit the bottom," Renault boss Carlos Ghosn was quoted as telling Le Figaro newspaper on Monday.
Ghosn said car industry executives are seeking soft loans for the coming two to three years to allow them to maintain cash flows and avoid running massive debt.
"The biggest problem facing the automobile industry today is financing," said Ghosn in a separate interview last week to France 2 television.
"We need to restore credit, that is fundamental. If it is not restored, a very large part of the automobile industry could die out."
Sarkozy has repeatedly asserted that France will not allow its car industry -- which directly or indirectly employs 10 percent of the nation's workforce -- to fall victim to the economic crisis.
Earlier this month, the president unveiled a 26-billion-euro (36-billion-dollar) economic stimulus plan that provided for billions of euros in aid for the struggling car and construction industries.
A 300-million-euro restructuring fund for the car industry, notably car parts suppliers, was announced along with a bonus of 1,000 euros for car owners who scrap their old vehicle to buy an energy-efficient new one.
The French state will also provide a one-billion-euro loan facility to support national champions Renault and Peugeot (Paris: FR0000121501 - news) , which have announced thousands of job cuts.
The meeting at the Elysee presidential palace was scheduled for 3 pm (1400 GMT), and came as the US administration was bogged down in negotiations about its multi-billion-dollar package for the Big Three automakers.
General Motors (NYSE: GM - news) , Ford and Chrysler have lobbied fiercely for the US bailout, prompting calls from the French government for Europe to match the US package with a plan of its own.
The European Automobile Manufacturers' Association (ACEA (Milan: ACE.MI - news) ) is seeking a 40-billion-euro rescue package from the European Commission.
After Renault announced 6,000 job cuts, most of them in France, and PSA Peugeot slashed 3,550 jobs, car parts supplier Faurecia (Paris: FR0000121147 - news) last week said it would scrap 1,215 jobs over the next two years.
Nine plants of the number one car part maker will be downsized and union officials said the news was worse than what they expected.
Suppliers Molex, Tyco Electronics, Key Plastics France have all announced job cuts and factory closures in France over the past weeks.
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