The French car and van maker Renault has announced operating losses of €275m in 2008 despite earning €598m during the first half of the year. In response, Renault has been given a €4.4bn (£3.9bn) bail-out by the French government and drastically cut all costs - including scrapping its dividend payouts and staff bonuses.
Renault's Chief Executive, Ghosn, said "market conditions would worsen and forecast further drastic measures to cut costs" according to the Guardian. In addition to the French tax payer, Renault also expects to benefit from a European Investment Bank loan of €400m whilst also maintaining access to a European Central Bank commercial paper facility of €2.5bn.
Despite the bailout and Renault now being 15% state owned, Ghosn refused to accept that the move was protectionist and believes that other countries will have no option but to follow suit. "I think this will happen everywhere. This is essentially in the form of loans on which we pay a premium of up to 9% if profits improve. France has opened the door, it won't be the last one to do and it appears to me to be normal."
Renault has just released details of its new Renault Clio in preparation of the Geneva Motor Show. Renault also makes the Trafic van and Renault Master panel van. Research and development costs are often shared with Nissan in the development of new vans.
SOURCE: Guardian.co.uk, 12 February 2009
