Tuesday, June 16, 2009
Renault boss defends state help
In a BBC World Service interview, Carlos Ghosn denied that taxpayers were propping up weak carmakers who should be allowed to fail.
Banks had stopped giving the industry the funds it needed, he told the Business Daily programme.
Mr Ghosn insisted that government support was to help the industry's 12 million workers not its shareholders.
Difficult transition
In Europe, the motor industry is getting two types of government help; easier financing and money to encourage motorists to scrap their old cars and buy new ones instead.
Carlos Ghosn is president and chief executive of Renault in France and Nissan in Japan, which he famously shook up and turned around.
He is also head of the organisation which represents all the companies that make cars in Europe - from Audi to Volkswagen.
He maintained that most markets had reached the bottom of their decline, aided by scrappage schemes and other incentives which he supports.
"What is being done by most European governments today is being seen favourably by the industry," he said.
Mr Ghosn admitted however, that the financial support will eventually have to cease and wants to see the transition from a scrappage system be as smooth as possible.
Taxing dilemma
Some have argued that businesses who cannot sell their goods and services go under and carmakers should not be any different. Mr Ghosn disagreed.
"The motor industry in Europe represents 12 million workers - 6% of the active working population of Europe," Mr Ghosn asserted.
"Nobody can just sit on the side while this industry as a whole is struggling," he added.
Critics however, have said there are too many car companies and that taxpayers' money helps hold up the restructuring which needs to happen.
"What is being done today is not to support the weak members of the car industry. It's being done to support all the car industry," Mr Ghosn insisted.
He realises that he could face a politically difficult task. Peugeot, Fiat and BMW are led by rich families.
"This is not about protecting shareholders, but about protecting employment," he said.
At Nissan, Carlos Ghosn managed to improve its fortunes without asking the Japanese government for money. But he said that was not currently possible in Europe.
"Due to the financial turmoil we are not able to raise cash from the banks which usually provide liquidity to the industry," he said.
"So we have asked the governments to provide a substitute."
DATED: 16.06.09
FEED: AW
