Macron and the challenge of France’s ’industrial emergency’

Macron and the challenge of France's 'industrial emergency'

Gathering of GM&S workers and their supporters, on 23 May, in Poitiers, awaiting the decision of the commercial court of Poitiers concerning the future of the auto supplier in the Creuse region.

(Julia Beurq)

The alarm sounds in the factory workshops to mark the usual handover from the morning to the afternoon team. But instead of starting or finishing their shifts, the workers in grey overalls are sat around a large table having lunch in the middle of silent machinery. The only sound is that of a deck of cards being shuffled, as the GM&S workers resign themselves to play yet another round.

Playing cards has become routine for the 277 auto-parts workers, who supply Renault and PSA, since they decided to occupy their factory in La Souterraine, a small commune in central France.

Since the plant went into receivership last December, GM&S workers have spent more time demonstrating than stamping and welding. They have staged a car go-slow between La Souterraine and Limoges, spontaneous demonstrations in front of PSA and Renault showrooms on the Champs-Élysées (where such activities are prohibited in theory) and two blockades of the PSA factory in Poissy – all to no avail. They therefore decided to ‘radicalise’ their action, threatening to blow up their plant with gas canisters, made clearly visible in the factory yard.

“We’ve been trying to get media coverage for our cause for months, but another factory closing down isn’t headline material, so we had to change tack,” explains Jean-Marc Du Courtioux, a CGT union representative.

Gerard, a 54-year-old welding operator, says with irony: “There’s nothing else we can do now other than appeal to the Pope! We’re sorry it’s had to come to this, but we had no alternative. And if we don’t succeed now, there’s no hope of anyone ever succeeding in the future.”

The new tactic worked for a while. French TV crews rushed to Creuse, in the heart of France – a department seriously affected by unemployment, poverty and rural exodus – to tell the story of the workers’ battle, perhaps the last, to save GM&S (the second largest private employer in Creuse) from compulsory liquidation.

Successive manufacturing layoffs

The media coverage of the GM&S case, just following the presidential election, came as an embarrassment for the new executive, right in the thick of the legislative election campaign.

This ‘explosive’ affair is symptomatic of the social situation the newly elected President Emmanuel Macron will have to deal with during his five-year mandate. Deindustrialisation is palpable and visible across in rural France.

Several thousand jobs are currently on the line: the auto supplier Nobel Plastiques, in Île de France, and Hanon in the Ardennes; Seita, the last French cigarette maker in Auvergne; the Castmetals foundry in Feurs; and the aerosol manufacturer Aéropharm in Marseille.

This phenomenon, which has been affecting France since 1970s, like many other developed countries, knows no bounds. Between 1980 and 2007, French industry lost 36 per cent of its staff, that is, 1.9 million jobs, leading to a considerable fall in the sector’s contribution to GDP, which dropped from 24 to 14 per cent.

According to the French Institute of Statistic, Insee, during the first quarter of 2017, the number of employees in the French manufacturing industry fell by 5,200. Over the period of a year, 20,000 jobs were lost in this sector, four times the population of La Souterraine.

So how is the government proposing to tackle this ‘industrial emergency’?

“We cannot forbid the closure of industrial sites…the answer does not lie in suppressing globalisation,” said Emmanuel Macron, on 26 April, to the crowd of Whirlpool employees whose factory in Amiens is set to be relocated to Poland in 2018 – another thorny issue marking the start of his mandate.

The French president’s remarks, which perfectly sum up his liberal ideology, would suggest that globalisation is responsible for deindustrialisation and nothing can be done to fight it.

It is a theory refuted by certain economists. “Globalisation is not the only explanation for the problems faced by French industry, although it does, of course, hold a share of the responsibility,” argues Gabriel Colletis, professor of economics at the University of Toulouse, in an interview with Equal Times.

“The Amiens sites, for instance, does not have any problem in terms of competitiveness. Whirlpool’s goal is not to sell cheaper washing machines, but to create bigger profit margins. The big corporate groups are opting to compete on costs rather than technical skills, which is simply a matter of choice.”

This strategy also holds repercussions for suppliers. GM&S, for example, relies on the orders placed by the two French automobile giants for 67 per cent of its business.

The current situation at GM&S is mainly due to the disengagement of PSA and Renault, which have significantly lowered their orders, switching to suppliers in Brazil or North Africa, for example, where the labour is cheaper.

But the problems at the Creuse site date back many years and have worsened with each successive insolvency procedure. The company has undergone five since the 1990s. Gérard, who started working at the factory when he was 18 years old, sums it up: “Being a GM&S employee is not a walk in the park, but we love our factory. We’ve been taken over by so many different investors that I don’t even remember their names.”

A number of them, such as Altia Industry, a German group, suspected of misappropriation and fraud, drained the company dry, whilst taking advantage of subsidies from the French state.

It is this sorry state of affairs that has stirred anger among employees like Patrice, aged 41, gathered in front of the commercial court of Poitiers awaiting the ruling that will seal their future.

“In my opinion, it has all been orchestrated and organised. PSA and Renault had no more use for us, they had shifted production elsewhere, and so they did everything to make us sink. They’ve got us with our hands tied.”

“In France, we have a serious problem in terms of corporate social responsibility among the major groups,” argue Frederic Boccara and Henri Sterdyniak, members of the Économistes Atterrés (Appalled Economists) collective. “A law is needed that would place companies under an obligation to redeploy their subcontractors’ employees, in cases where they completely impose their specifications, and they are their exclusive customers. It is the law that is missing but, unfortunately, it is not on the agenda.”

The new president, symbol of finance

La Souterraine has received visits from several politicians over the last six months: François Hollande, Bernard Cazeneuve, prime minister at the time, and Bruno Le Maire, now the new minister for the economy, who managed to have Renault and PSA increase their orders, but not to the level needed to keep on all the employees.

“Since the state is a shareholder in PSA and Renault, it is in a position to do something, it has a say,” says CGT union representative Yann La Brousse, in front of the commercial court of Poitiers. “I’m expecting the government to take an interest in industry and small businesses in rural areas, because we want to be able to continue to live and work here. We don’t want to be forced to leave for the city to work. We have a right to stay in the countryside where we are from,” he adds.

Even Emmanuel Macron promised them, in the run-up to the first round of the legislative elections, that he would “do everything in his power”, whilst also pointing out he was not “Father Christmas”. But the workers are doubtful and despondent.

“We vote for politicians, but it is not they who run the country, it is the two Carloses [editor’s note: Carlos Ghosn and Carlos Tavares, CEO of Renault and chair of the PSA Managing Board],” says Jerome Imbert, head of estimates at GM&S, where he has worked for 22 years. “Macron is the very symbol of the situation we are in! He represents finance, he is not interested in manufacturing. I don’t see any reason for him to save us.”

For several years, Jean-Louis Borie, the lawyer defending the GM&S workers, along with many others whose employers have gone into receivership, remarks on the growing “financialisation” of the economy.

“Those taking over these sites do financial deals at the bar of the commercial court,” he says. “They buy up businesses for a few euros and take advantage of them to benefit from state subsidies. They feed off the animal, fattening themselves up and leaving nothing but the bones when they go. That is what has happened at La Souterraine: there has not been an industry chief for years, just financiers, unscrupulous employers managing the plant. The workers are still hoping to find a genuine industrialist, whose reasoning will not be based on dividends alone.”

The CGT confirms this appraisal. In 1985, the dividends paid out to shareholders accounted for five per cent of the value added in the industry, as compared with 25 per cent in 2015, which has a negative impact on investments.

Judging by the new president’s programme – largely inspired by the action plan set out when he was minister of the economy – fighting this trend is not one of his priorities. In addition to the cuts in taxation on capital gains, he also plans to transform the industrial model through digital technology.

His vision of the economy is far from realistic in the eyes of many economists, such as Henry Sterdyniak: “According to Macron, the labour market needs to be made more flexible to attract innovative companies to France. Once the ‘overly rigid’ labour law has been destroyed, it will be much easier to lay off workers in ‘out-dated’ manufacturing and to hire textile workers in electronics companies, for example! It means destroying labour-intensive companies to make way for start-ups where the staff numbers are much lower. France is also at risk of losing the sectors where it has solid industrial skills, for the sake of a largely utopian sector.”

In La Souterraine, where the workers’ average age is 49, everyone is anxious about what the future holds for them, and find it hard to imagine a France without workers.

“It is thanks to us and to salaried employees that the economy is still ticking over, we are the ones who consume,” says Didier Soulas, a 54-year-old forklift truck driver, wearing a red beret.

His colleague, Gérard, is tormented by one question: “At 54 years of age, at the end of my working life, will I be capable of going back to school and training to do something else? I don’t think so. And the young people, what are they going to do when they enter the labour market? Not everyone is good at school, so they really should have the option of working in factories.”

The fate of the GM&S workers is due to be sealed in the coming days, when the commercial court of Poitiers issues its decision.

This story has been translated from French.