Renault secures €5 billion government loan to survive coronavirus shutdown

The French government said it has signed off on a state-backed loan of €5 billion ($5.6 billion) for carmaker Renault in the wake of the Covid-19 shutdown, which had prompted the company to lay off nearly 15,000 people worldwide.

The loan has been approved by Finance Minister Bruno Le Maire after his meeting with executives, labor representatives and local officials. According to Renault, the credit facility will help finance the company’s liquidity requirements.

Last week, the French firm announced 15,000 job cuts globally, including 4,600 in France, as part of a major restructuring. The announcement sparked weekend protests at some factories, including at Maubeuge, in northern France – although Renault’s chairman, Jean-Dominique Senard, has assured workers that this site will not be closed.

READ MORE: Renault workers protest automaker's plan to axe nearly 15,000 jobs

In February, Renault unveiled its first annual loss in a decade, after its former CEO, Carlos Ghosn, was arrested in Japan in 2018 over alleged financial misconduct at its partner Nissan, where Ghosn was chairman.

The company has pledged to cut costs by €2 billion ($2.2 billion) to regain its financial footing after sales in its core French market plunged 89 percent in April, hurt by the factory shutdowns and dealership closures around the world due to pandemic.

France’s President Emmanuel Macron has promised an €8 billion ($9 billion) plan to revive the nation’s auto industry by making it the European leader in electric cars, including subsidies for new car purchases.

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