Renault SA (RNO) says if President Francois Hollande wants more cars built in France, he needs to tackle the country’s high labor costs and rigid work rules.
France’s second-largest carmaker, which is based near Paris and 15 percent owned by the government, built fewer than a quarter of the 2.83 million cars that rolled off its assembly lines last year in France. With plants around the world, Renault makes its Clio hatchback in Turkey and is ramping up production at a new 1 billion-euro ($1.29 billion) factory in Morocco.
“Making the same Clio IV in France rather than in our Turkish plant is 1,300 euros more expensive and half of the gap is due to labor costs,” Chief Operating Officer Carlos Tavares said. “Within Renault, the French plants are the weakest. It’s not only a matter of cost, it’s a matter of flexibility.”
For Socialist President Hollande, confronting such grievances from French industry by introducing a more flexible workplace environment would put him at odds with his base among unions. At the same time, not addressing the competitiveness concerns of business leaders risks worsening an economic climate that is resulting in thousands of job cuts at companies from carmaker PSA Peugeot Citroen and Air France-KLM to drug-maker Sanofi, driving unemployment to a 13-year high…
Choosen excerpts by JMM from
via Hollande Ducks as French Industry Bleeds Jobs – Businessweek.
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