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Renault to shift production from Slovenia to Paris area - for now

Article published on the 2009-03-20 Latest update 2009-03-20 14:37 TU

A Renault Twingo on the production line in Novo Mesto, Slovenia(Photo: AFP)

A Renault Twingo on the production line in Novo Mesto, Slovenia
(Photo: AFP)

The French car company Renault announced Friday it would move production of some its small cars from Slovenia to France, because the plant currently in use is overextended. French Junior Minister for Industry Luc Chatel says the move shows that France’s car industry bailout is working, despite European Commission concerns about protectionism.

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“This is not about cutting jobs in Slovenia,” said French President Nicolas Sarkozy, defending the decision at a press conference in Brussels.

Renault’s subsidiary in Slovenia, Revoz, said the decision to start production of Clio cars at Renault’s factory in Flins, near Paris, was a temporary solution in response to a rising demand for smaller cars.

Revoz said the plant in Novo Mestro, about 80 kilometres east of Slovenia’s capital, Ljubljana, is already working at near to full capacity.

“Faced with the sharp increase in demand for the Twingo and Clio II models, which are currently produced in Slovenia, we were unable to answer market demands,” said Revoz in a statement.

According to Luc Chatel, about 400 temporary jobs will be created in France, between June and October, to produce 8,000 cars. The jobs will be offered to Renault workers in other parts of France who are currently unemployed.

Chatel said on France’s Europe 1 radio Friday that the move is an example of how the French automobile sector bailout is working.

“[The automobile plan] is starting to show results,” he said, pointing to the relocation of jobs from Slovenia to France.

In February, French president Nicolas Sarkozy agreed to lend auto makers, including Renault, three billion euros each if they did not lay off French workers or move factories out of the country.

The plan, and Chatel’s announcement, worried the European Commission, which is concerned about protectionism. The Commission has said it is satisfied with the bailout plan, but it is seeking more explanations about Renault’s move from Slovenia to France.