UPDATE 3-Renault adds French jobs, denies protectionism

* French plant in Flins to boost Clio II output
 
* Will make 8,000 models in 2009, adding 400 jobs * Minister says Renault 'repatriates' output
 
* Renault, Sarkozy say no transfer from Slovenia plant
 
PARIS, March 20 - Carmaker Renault on Friday announced a production boost at one of its French plants but distanced itself from a minister's comments that the move amounted to transfer of foreign auto jobs back to home soil.
 
As the world's leading carmakers battle to survive the worst sales crisis for decades in an industry now flirting with protectionism, French Industry Minister Luc Chatel characterised the temporary output increase as a first sign that aid measures for the country's auto sector were working.
 
But Renault said it would build more older Clio II models at Flins near Paris to meet extra demand and because production at Novo Mesto in Slovenia had already been boosted to three shifts and could not be raised further.
 
The European Commission said it was surprised by the minister's statement and would ask the French authorities to provide more information.
 
"What's surprising in this specific case is that the industry minister ... should have made a statement that this would be directly related to the French automobile plan," Commission spokesman Jonathan Todd said.
 
French President Nicolas Sarkozy told reporters after an EU summit that Renault's plan only involved creating extra jobs in France and "does not take away one job from our Slovene friends".
 
French carmakers have pledged to safeguard production sites in France in exchange for 6 billion euros ($8.2 billion) in relatively low-interest rate financing by the state.
 
The Czech Republic, among others, objected to this package as it flirted with protectionism but the deal was cleared by the European Commission.
 
"Renault will ... repatriate the production of a vehicle up to now made outside France to the Flins plant. That will be extra output for that factory," Chatel told Europe 1 radio.
 
Car sales in Europe fell 18.3 percent in February. German registrations were up 21.5 percent, but sales in France were down 13.2 percent against a 48.8 percent drop in Spain and a 24.4 percent fall in Italy.
 
Renault, which together with alliance partner Nissan Motor of Japan ranks fifth in the world, said it would lift production of the Clio II at Flins between June and October, boosting 2009 output to 8,000 cars.
 
"Due to the French incentive for scrapping cars, there is a boost in demand for cars such as Clio, Twingo, Modus," a company spokeswoman said. "Flins and Novo Mesto are complementary operations," she added.
 
ADDING JOBS
 
A union official at Force Ouvriere union, who was briefed on the matter, said on Friday 400 jobs would be added at Flins.
 
At Renault, a spokeswoman said the posts would be offered to staff at its Sandouville plant, which has been hit by a drop in sales of the Laguna saloon, or employees at the Cleon gearbox and engine plant who otherwise would be without work.
 
Renault replaced the Clio II model after 2005 when it brought out the Clio III -- a modern sporty hatchback -- but kept the Clio II platform and rebadged the car as the Clio Campus entry-price model.
 
In Flins, Renault made 152,600 Clio III cars in 2008 and 6,900 Clio Campus. In Europe, the maker sold 300,000 Clio IIIs and 51,600 Clio Campus, including 23,000 in France.
 
PSA Peugeot Citroen, Europe's second-biggest carmaker and Renault's domestic rival, is continuing to make and sell its older Xantia Picasso models alongside the newer and more expensive C4 Picasso models for Citroen.
 
(Additional reporting by Lucien Libert, Veronique Tisson and Bate Felix; Editing by Jon Loades-Carter, David Cowell, John Stonestreet)

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