Carmaker Renault said today it is shifting a production line from Slovenia to Paris to meet a jump in demand and denied the move was linked to a pledge to keep jobs in France in exchange for state aid.
The French auto giant said it was ramping up production of its small Clio II and Twingo cars, which are both produced in Slovenia, after trade-in bonuses in several European countries boosted demand for the models.
Since the Slovenian plant of Novo Mesto is already running at full capacity, production of Clio cars would be shifted temporarily to Flins near Paris, it said.
The move would create work for 400 people in Flins from June to October, while the spare capacity freed up at Novo Mesto would enable it to ramp up production of the Twingo.
Renault's announcement set off alarm bells at the European Commission whose competition spokesman said it would seek guarantees from Paris that the move is not protectionist and complies with EU free trade rules.
The Commission pounced on comments by France's Junior Minister for Industry Luc Chatel, who linked Renault's decision to the state's bailout for the auto sector, saying it was proof the €6 billion plan was working.
National champions Renault and PSA Peugeot Citroen both pledged not to close French factories or dismiss French workers in exchange for the aid package.
President Nicolas Sarkozy, welcoming Renault's decision, insisted it would not cost any Slovenian jobs.
'This is not about cutting jobs in Slovenia,' the president told a press conference at an EU summit in Brussels. 'It doesn't take a single job from our Slovenian friends and it creates jobs for Flins.'
Commission head Jose Manuel Barroso later toned down suggestions of a row, saying: 'I think there was a misunderstanding.'
'We have been informed that the company in question is planning to increase its output in France but without abandoning its production in another country,' Barroso said.
Slovenian Prime Minister Borut Pahor also played down the situation. 'As far as I'm informed it is very normal, it's okay,' he told reporters, saying he had discussed the transfer with Mr Sarkozy.
