French Government Aid To Auto Makers Comes With Strings Attached
The French government is giving money to its struggling domestic automakers. But this is a government we're talking about, so you know there's going to be some conditions. And there are. Automakers receiving said francs are obligated not to close down any factories in France and not to give bonuses to their executives. Renault has said that it will follow the stipulations. Rival Peugeot, however, is resisting over the requirement of keeping plants open in France. There is talk that both Peugeot and Renault want to move some production of their vehicles to other countries where the cost of production is lower. This would assist them to better compete with the Asian automakers. They may have good reason. Unlike their American counterparts, which saw sales and marketshare plummet faster than ex-US president George W. Bushi, car sales in France fell 15.9 percent in December. But the figures for 2008 show that sales in the first half were actually pretty strong so losses experienced in the second half of the year were barely worse than 2007 -- down 0.6 percent. The French government will also provide $385 million (?300 million) to upgrade parts supply companies. The fund is expected to ultimately go up to $26 billion (?20 billion) and will be used to assist a variety of critical industries. via WardsAuto
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