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Renault's low-cost Moroccan factory riles politicians

Renault's low-cost Moroccan factory riles politicians
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France’s Renault has opened a giant factory in Morocco to build low-cost vehicles.

The salaries of workers at the plant near Tangiers amount to less than a quarter of the French minimum wage.

Renault boss Carlos Ghosn brushed off political considerations about the partly state-owned company exporting jobs saying they would never even thought of building the factory in Western Europe as that was “incompatible with the concept” of low-cost vehicles.

During the last crisis, the government lent six billion euros to Renault and PSA Peugeot Citroen on condition that they avoid domestic closures. The French state is Renault’s biggest shareholder with a 15 percent stake.

The factory opening drew immediate criticism from politicians in France, where unemployment is at a 12-year high.

“It’s completely intolerable and even scandalous,” said Christian Estrosi, a lawmaker and former industry minister for Sarkozy’s governing UMP party. “Carlos Ghosn is breaking the promises he made to his main shareholder.”

Senator Gerard Larcher, a former majority leader, said Renault was ducking its “societal responsibility” to French workers and suppliers.

The factory is intended to satisfy strong European demand for no-frills vehicles in a bid to buck the overall decline in the region’s car market.

With an initial investment of 600 million euros, sweetened by tax breaks, the Moroccan plant will reach an annual production capacity of 400,000 vehicles next year.