CUTTING COSTS

JANUARY 13 2010 15:00h

Renault to shut down production in Spain, Slovenia

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French carmaker Renault is planning to shut down production of its Clio model in Spain and Slovenia but the car will still be made in France

PARIS, January 13, 2010 (AFP) - French carmaker Renault is planning to shut down production of its Clio model in Spain and Slovenia but the car will still be made in France, a company executive said Wednesday.

Renault has come under heavy pressure from the French government to keep jobs at home following press reports about a planned shift of Clio production from France to Turkey.

"We plan to stop production of the Clio in Spain and Slovenia," Patrick Pelata, Renault's chief operating officer told reporters after a meeting with Industry Minister Christian Estrosi.

Pelata said no decision has been made on beefing up Renault's assembly lines in Turkey.

"No decision has been taken because it is not yet time to make decisions," he said. "In any case, the Clio will be produced in Flins, regardless of what happens, and that is very clear."

France's number two car maker, Renault also makes the Clio at its plant in Flins, in the western Paris suburbs, and Bursa in Turkey.

Some 8,000 Clios rolled off the assembly lines of the Valladolid plant in Spain from January to June last year, destined mostly for the Spanish and Portuguese markets.

About 17,000 Clio II models were also manufactured in the Novo Mesto factory of Slovenia in the first six months of last year, according to Renault.

The French government on Tuesday warned Renault that shifting production to Turkey must not lead to job losses in France.

Employment Minister Laurent Wauquiez said there was a "red line" that Renault must not cross -- "which is no plant closures and no layoffs."

"Renault is not just any ordinary company -- the state holds 15 percent and we are not going to be spectators because this is a company that has received a lot of assistance during the crisis," Wauquiez told RTL radio.

The spokesman for President Nicolas Sarkozy's UMP party, Frederic Lefebvre, had said a complete shift to Turkey would be "unacceptable" and called for the state to intervene to block any such move.

Over the past decades, France, which prides itself as an industrial powerhouse, has seen many of its plants move to Asia and elsewhere where production costs, in particular labour and taxes, are much lower.