France's Sarkozy to meet struggling carmakers
By Yann Le Guernigou
PARIS, Dec 15 (Reuters) - French President Nicolas Sarkozy meets senior automobile industry executives on Monday to discuss aid plans for a sector that is slashing jobs in response to a dramatic fall in sales.
Like their counterparts across the globe, France's carmakers have been hit full on by a sharp downturn in demand as the financial crisis has spread to the manufacturing industry and thousands of jobs are expected to be lost.
"2009 will be a year of living dangerously, when anything might happen," Renault (RENA.PA) chief executive Carlos Ghosn was quoted as saying in the Le Monde daily. "No one is going to get out of this crisis unscathed."
Sarkozy was due to meet executives from across the industry at the Elysee Palace at 1400 GMT.
He has pledged repeatedly that he will not abandon the sector which he sees as the heart of France's manufacturing industry and help for the carmakers was a prominent part of the 26 billion euro ($35.01 billion) stimulus package announced earlier in the month.
But while not as precariously placed as the so-called Big Three U.S. companies, French automobile makers are facing massive problems, creating a growing political headache for a government that says the sector supports one in 10 French jobs.
New car registrations were down 14 percent year-on-year in November in France as car sales across the world slumped [ID:nL1337831] and worse is expected.
"I do not see a quick end to the crisis the automobile sector is going through," Ghosn told French media. "We have not yet touched bottom."
France's largest carmaker, Peugeot-Citroen (PEUP.PA) has announced plans to cut 2,700 jobs in France and the second biggest producer, Renault, has pledged to cut 6,000 jobs across Europe and temporarily close plants to match a halt in demand.
Industrial production data released last week showed output in the car industry fell by 14.3 percent in October, the sharpest fall in almost a decade and with many plants shut in December and January, even sharper falls are expected.
Sarkozy has pledged 1 billion euros to help unblock the frozen car credits branch and offered a 1,000 euro handout to car buyers trading in their old vehicles for more environmentally friendly models.
But he has also made it clear that the government will look very unfavourably on plans to shift production to lower cost locations outside France and will not offer state aid to those that do. (Writing by James Mackenzie; Editing by Charles Dick)
