The French state will lend 3 billion euros (US$3.9 billion) each to automakers Renault and PSA Citroen as part of aid to the auto industry expected to be unveiled yesterday, the dailies Les Echos and Le Figaro reported.
In order to receive the 3 billion euro loans at preferential rates, the two automakers are to pledge to not lay off any workers or close any factories in France, the dailies wrote.
The companies are also to pledge to issue moderate dividends and bonuses to executives will be reduced, they added.
French Prime Minister Francois Fillon promised French automakers last month aid in the area of 5 billion euros to 6 billion euros.
The amount could rise further if the French state decides to help Renault Trucks, which is owned by AB Volvo.
The French state provided 1 billion euros of preferential rate loans to the financing arms of the automakers in December. It also brought in a bonus to buyers to encourage the purchase of new cars.
The aid package has sparked fears of protectionism after French officials, including French President Nicolas Sarkozy, appeared to tie it to bringing production back to France from other countries, including other EU countries.
The Financial Times also reported that Paris would ask car companies that receive state aid to buy only French-made parts, which also fueled protectionism concerns at the European Commission.
A slump in sales in the second half of last year forced both Renault and PSA Citroen to temporarily halt production at numerous sites at the end of last year.
Car sales were down 7.9 percent last month compared to the same month the previous year, following drops of around 15 percent in November and December.