Friday, June 23, 2017

Peugeot on the brink How Paris Is Killing French industry SPIEGEL ONLINE News

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well-meaning people can often be particularly dangerous Take French President François Hollande and Minister for Industrial Renewal Arnaud Montebourg, for example, they want to rush with the French automaker PSA, which has led to a crisis with its Peugeot and Citroën Representatives of the CGT union, as Jean-Pierre Mercier, also want to help, we will fight for our jobs and livelihoods of our families, said Mercier.
The French government and unions want to prevent Peugeot to close its plant in Aulnay-sous-Blois, outside Paris, and cut 8,000 jobs But if politicians and union leaders are successful, they will make things worse Maybe they'll manage to save thousands of jobs in France in the short term, but in doing so, they will endanger even more the future of the company.
The company, which has made cars since 1890, is struggling to survive sales have collapsed, and the plants do not work anywhere near PSA is losing the capacity to 140 million 173 million per month .
For 3000 Peugeot workers at Aulnay-sous-Bois, their work has ended temporarily to 10: 30 pm July 26 The plant was closed for five weeks, as every year for summer vacation, but this time, things were a little different the beginning of the vacation period had a bitter aftertaste workers had just learned that the factory was to be finalized in 2014.
President Hollande immediately responded, saying that PSA downsizing plans were unacceptable and had to be renegotiated Minister Montebourg said he had little faith in the management of the company and speculated that perhaps the car company was just play the Malade Imaginaire He also said he had a problem with the company's strategy and the behavior of its main shareholder, the Peugeot family, which holds more than a quarter of its shares and received substantial dividend last year.



Both CEO Philippe Varin and Supervisory Board Chairman Thierry Peugeot has been called on the carpet, and the Peugeot family was forced to hear Montebourg a lecture on patriotism Society, the minister said, doesn t belong only to its shareholders but also to the history of France, an area, a national idea.
The French state holds a share of Renault, second car maker of the country, but no Peugeot Nevertheless, the government acts as if Peugeot was actually a crown corporation in this regard, it demonstrates how matter in a tone french neutral politicians involved in the management of large enterprises.
For the government, the fight on the Aulnay plant is not a question of the fate of a single plant in the credibility of the president is involved, especially after making a campaign promise to help French industry get back on its feet, but now the case is Aulnay underscoring the sad shape of French industry.
France is still one of the strongest world's leading industrialized nations Car manufacturers Peugeot and Renault, pharmaceutical company Sanofi, train and power plant maker Alstom and the defense contractor Thales formed an industrial core, yet it is one that has been deteriorating in many areas for years France has lost some of its international competitiveness.
Holland's predecessor, Nicolas Sarkozy, has said France would not be a great nation on the day we charge don t build trains, airplanes, automobiles and ships.
Nevertheless, Sarkozy could not stop the dismantling of factories in France The number of jobs in the auto industry fell by more than half between 1980 and 2010. This was not an inevitable development, as evidenced by the situation in neighboring Germany, where VW, Daimler, BMW and others employ more people now than they did three decades ago.



A research on the causes of the malaise of France quickly ends at the door of Management The charm of Peugeot and Citroën has virtually disappeared Citroën DS, which was known for its hydro-pneumatic, self-leveling suspension and 2 CV - known as duck name in Germany, where it was almost as popular as the VW Beetle - are now only memories.
The current management of Peugeot failed to spot trends with any SUV in its product range, Peugeot can benefit much from the boom in sales on the contrary, the company has invested heavily in hybrid models diesel and electric motors, which are not selling because of their high price.
The executives at other automakers have made similar mistakes, but the mistakes only weren t enough to plunge a company in such a deep crisis There is another reason for the decline Peugeot The automaker has largely missed the opportunities by globalization Peugeot and Citroën sell more than half of their cars in Europe, where the market is declining PSA narrows with it.
Volkswagen, on the other, has established a presence in China and North America from the beginning, and the automaker from Wolfsburg now benefits from the growth in these markets because VW only sells only about a third of its cars in Europe.
It is no coincidence that Peugeot is so heavily dependent on Europe, but it is also a consequence of the French industrial policy Paris is generous with its national companies, and the government - whether it is conservative or socialist - is quick to in exchange support with grants, however, expect French companies to remain faithful to the French market.



In 2009, Nicolas Sarkozy has provided both with Peugeot and Renault 3 billion in government loans with low interest In return, the two companies had to agree not to close all domestic factories or move production overseas for five years.
When Renault weighed outsourcing the production of its subcompact car, the Clio in Turkey in 2010, the Company incurred the wrath of President Sarkozy has made clear that it would be unacceptable and emphasized that the government was not t in the pump business so much money in the automobile industry so that it can turn around and move their factories overseas in response, Renault lowered its Turkey plans.
The construction of a Peugeot plant in the Czech Republic also upset Sarkozy building a factory in India to sell French cars the Indians was quite acceptable, he said, but the construction of a factory in the Czech Republic selling cars in France is not.
Over the years, this approach to industrial policy was like a bonus stay at home to French companies, and assistance was extended to those who have complied with the wishes of the government and remained in France.



Peugeot has also been weakened by the success of the French unions, who got increases in wages - with the support of the government between 2000 and 2010, unit labor costs in the French automotive industry increased by 8 percent, against only 1 6 percent in Germany.
Since Peugeot - unlike its German rivals Audi, BMW and Mercedes-Benz - does not make luxury cars, the French were unable to raise prices to keep pace with rising costs this profit decline originally intended, but now french carmakers are losing money.
Ironically, the victims of these two developments - focusing on production in France and rising wages - are those whose cause is defended by governments and union representatives Auto Workers them -Same.
Aulnay factory workers had to look at their business went into gradual decline Aulnay was once one of the most modern factories in the country, annually producing more than 400,000 cars Today, fewer than 140,000 vehicles rolling off its assembly lines each year.
A car factory that produces so few vehicles can hardly be profitable if President Hollande and unions forced Peugeot to keep the plant in operation, they will accelerate the demise of the company.
Peugeot needs capital to build and develop factories in China, India and Brazil If society continues to suffer high losses with its French plants, it lacks the funds to invest in growth markets.


If Peugeot shows that it is time for a change in the French industrial policy, but nothing is in sight.
We will fight to the death for our industrial base, industry minister said Montebourg.







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