Coronavirus: Renault gets its €5bn government-backed loan

Jill Petzinger
Jill Petzinger, Germany Correspondent, Yahoo Finance UK
Protester holds a banner reading "don't touch MCA its our plant" as they demonstrate Renault's decision to cut 15,000 jobs worldwide, including 4,600 in France, in Maubeuge, on May 30, 2020. Photo: Francois Lo Presti/AFP via Getty Images

French carmaker Renault (RNO.PA) has confirmed it has finalised a €5bn (£4.45bn, $5.6bn) state-backed loan to help it survive the coronavirus pandemic that has devastated the automotive industry.

The French government, which owns a 15% stake in Renault, will back up to 90% of the borrowed amount, the carmaker said.

Renault faced protests at some plants in France last week, after it announced that it would make some 4,600 redundancies, as part of a plan to cut around 14,600 jobs globally and reduce production capacity as part of a plan aimed to create cost savings of €2bn in the next three years.

French president Emmanuel Macron recently unveiled an €8bn rescue package to help the country’s struggling car industry survive the coronavirus crisis.

READ MORE: Coronavirus: France earmarks €8bn stimulus package to support its car industry

Macron stressed however that the government will want to see carmakers commit to safeguarding jobs in France. He also said that the focus must be on boosting electric- and hybrid vehicle production.

Renault, Nissan (NSANY), Mitsubishi (MSBHY) last week announced a radical restructuring of their 21 year alliance to help  streamline operations and avoid doubling up on development and production costs.

READ MORE: Renault, Nissan and Mitsubishi reboot alliance with new strategy

“We will focus on efficiency and competitiveness, rather than volume,” said chairman of the alliance Jean-Dominique Senard at the joint press conference of the three companies.

“The new framework will allow each Alliance member to enhance its core capabilities, and benefit from the capabilities of the other firms.”

There were protests in Barcelona last week after Nissan announced that it would close its plant there.

While Nissan committed to keeping its plant in Sunderland open, it said on Wednesday that the plant, the largest in the UK, would not be sustainable if the country were to leave the European Union without a trade deal.

READ MORE: Nissan warns UK’s largest car plant will not survive no-deal Brexit