Renault Admits Yielding to Arab Pressure in Leaving Israel

The Renault auto firm today issued a statement which in effect admitted that it had cancelled its contract with the Kaiser-Frazer assembly plant in Haifa as a result of Arab boycott pressures.

The statement said that for the past several years “several” countries, contrary to “the rules and practices of international law, ” have refused admission of goods from companies which have contracts with Israel firms. The countries were not identified in the statement.

The French auto firm, which is partly owned by the French Government and which has insisted until now that the cancellation was for such economic reasons as high Israel taxes and high production costs, said today that after many efforts to by-pass such restrictions, it found itself “forced to make a choice on strictly business grounds of the outlet which furnished the greatest number of orders and hence the most work to French workers.”

The company added that although it had been “fully aware of the problems,” it signed a contract with Kaiser-Frazer in Israel in 1955 and that in September 1958, it offered to renew the contract subject to a guarantee of a certain number of sales annually. While it proved impossible to renew the contract on this basis, the company declared, Renault offered to supply parts to the Haifa firm for several months to avoid an abrupt cessation of work there.

The statement added that Renault would continue to supply as many of its cars to Israel as the Israel Government would permit and would continue to supply parts for Renault cars already sold in Israel. Israel sources in Paris declined to comment on the Renault statement.