Last November, Emmanuel Macron visited the northern French town of Amiens where he met with a small group of former employees of a factory that once belonged to US domestic appliance manufacturer Whirlpool.
It was his third visit in almost five years, beginning in April 2017. That was when, while campaigning between the two rounds of the presidential elections, he promised to help find new employment for the almost 300 workers who were to lose their jobs with Whirlpool after its decision, announced earlier that year, to close the plant and transfer its production of tumble dryers to a site at Lodz, in Poland.
Whirlpool shut the Amiens plant in 2018, after which it was bought-up twice, but both takeovers eventually collapsed, when both companies behind the attempts were successively placed in receivership. The businessman who led the first takeover, when he re-employed 162 of Whirlpool’s former 278 staff, was earlier this month given a suspended prison sentence and a fine of 25,000 euros for misuse of company assets and bankruptcy.
Meeting in a café with nine of the dead plant’s former employees on November 22nd, including four union officials, Macron listened to their despair after years of false hopes. “I understand very well,” he told them. “I was duped along with you.”
The outgoing French president, who has still not formally announced his widely expected bid for a second, five-year term of office in the presidential elections this April, knows very well that the fate of France’s industrial fabric is his Achilles heel, notably given that his track record of responsibility in the domain is not the past five years, but over a period of ten.
Enlargement : Illustration 1
As of his appointment in May 2012 as deputy secretary general of the Élysée Palace under the then newly elected socialist president François Hollande, and subsequently when serving as Hollande’s economy minister between 2014 and 2016, Macron was in charge of managing, often behind the scenes, the major industrial strategy decisions involving large French corporations. Since his election as president in May 2017, none of that has changed; the major strategic decisions are arbitrated within the walls of the Élysée (dubbed “le Château”), and never explained in public.
They are taken in such a manner that it is never clear which are driven by Macron himself or, with his approval, by his secretary general, Élysée chief of staff Alexis Kohler. This form of diarchy is such that it led to very public conflicts with current economy minister Bruno Le Maire, notably concerning the merger last year of French waste and water management groups Veolia and Suez .
The result of Macron’s ten years of high-level involvement in industrial strategies is hardly a convincing success, yet since the beginning of his term as president the French state has, in various forms of aid and tax breaks, handed corporations more than 40 billion euros per year.
A continuing de-industrialization
“Thanks to our policies, we have succeeded in stabilising industrial employment in France since two years,” declared economy minister Bruno Le Maire in an interview in February 2019 with French financial daily Les Échos (in French, here). But by then, the situation was already dire; over the past ten years, the French economy has lost more than one million jobs in the industrial sector, while over the same period the contribution of industry to the country’s gross domestic product (GDP) has fallen from close to 20% to around 10% – a percentage lower than any other country in the eurozone with the exception of Cyprus, Malta and Luxembourg.
The list of industrial companies and plants that have gone to the wall over recent years reads like an endless litany of unprecedented destruction, notably including Ascoval, GM&S, Doux, Saint Louis Sucre, Roquette, Luxfer, Arjowiggins, La Chapelle Darblay, Bosch, Ferropem , the Poitou foundries serving carmakers, Renault’s Brittany foundry, MBF, and the Société aveyronnaise de métallurgie.
It took the Covid-19 crisis for the French government to suddenly realise the extent of the disaster (which in itself illustrated how little attention had been paid to it before). That was when French pharma giant Sanofi, vaunted as a world leader in vaccines, proved unable to make a Covid-19 vaccine, and when it was discovered that France could not meet its domestic demand for the production of masks, hand sanitizer gel, miscellaneous small medical items, and even such basic medication as paracetamol – not to mention wood and, of course, semiconductors.
From the early 1990s up until 2004, France had a trade surplus, but the volume and values of exports have steadily fallen since – while imports have risen – to the point where the trade deficit for 2021 reached a record 84.7 billion euros.
An industial strategy akin to Monopoly
The saga of Alstom, once a jewel of French heavy engineering, continues to dog Macron. It is an emblematic example of his industrial policy failures. Beginning in 2012, he actively worked from the backrooms of the Élysée for the accelerated dismantlement of what was the first French conglomerate (first as CGE, then Alcatel-Alstom). In 2014, its electro-mechanical branch was sold to US giant General Electric, when Macron, by then economy minister, neutralised the few measures taken by his predecessor, Arnaud Montebourg, to defend the group. Alcatel was taken over by Finnish telecommunications corporation Nokia in 2015, and most of the workforce in France was laid off. Meanwhile, it was only the intervention of the EU competition authorities that saved the rail division from being absorbed by Germany’s Siemens.
Macron has never spoken the least criticism of the unbridled financialization led by corporate leaders. Quite the opposite, he espoused the approach, and the financial Monopoly game that is played out in sell-offs, acquisitions, mergers and dismantling, appears to be his industrial strategy. The aim is recurrently that of creating a world, or European giant, or at least a French champion. Accompanying the transactions are the hundreds of millions of euros paid out in commissions to business bankers, lawyers and consultancy agencies, to a backdrop of relocated production activity, the closure of plants, and the loss of direct and indirect jobs.
During Macron’s presidency, the Élysée has encouraged and also initiated the liquidation of large groups; apart from Alstom, one can cite the examples of private-sector companies like Lafarge, Essilor, Rhodia, and Suez.
But there are also examples of this in corporations in which the French state was a shareholder, and notably concerning what was once a major pillar of the French economy, namely the energy sector. The energy industry engineering and construction company Technip emerged empty, as was foreseeable, after its 2017 merger with US firm FMC technologies. Utilities giant EDF, which Macron made liable for some of the losses of the hidden bankruptcy of nuclear technologies group Areva, and also the construction in Britain of two EPRs at the nuclear power plant of Hinkley Point, has become weakened and indebted, and threatened with a partial dismantlement that would hand a slice of income from nuclear energy to the private sector. As for Engie, the former public gas supply monopoly GDF, it is being sold in bits to Bouygues, Veolia and others, while waiting in the wings to buy up the remainder is Total, the major beneficiary of the ransacking of the energy sector.
While the carmaking industry has been better preserved, Renault was significantly destabilised by the scandal surrounding its former boss Carlos Ghosn, whose behaviour was tolerated for years despite the government being perfectly aware of the situation. When PSA merged last year with Fiat Chrysler to create Stellantis, one of the first decisions made by the new group was to install its headquarters in the Netherlands, to which the French state as a shareholder gave its approval.
'France 2030', a plan with no vision
In September 2020, the French government, declaring it had learnt the lessons of the Covid-19 crisis, announced the creation of a high commission for national planning, led by François Bayrou, a veteran centre-right politician and ally of Macron’s LREM party. Bayrou’s mission was defined as “to enlighten the collective decisions the nation will have to take in order to maintain or reconstruct its sovereignty”.
Now, more than one year later, there is no evidence of what the high commission has achieved, and it was not even officially associated with the “France 2030” plan presented by Macron amid great pomp in October 2021. That involved investing 30 billion euros to be spent on meeting “the challenges of our times”, to help “the emergence of future technological champions”, and the “transition of our centres of excellence that are carmaking, aeronautics, and space”. In reality, the sum is above all sprinkled into multiple projects centred on an absolute faith in digital, electric and nuclear technologies. Furthermore, the projects are to be led by the private sector, without intrusion by, nor compensation to, the state.
While the state has recently been distributing a yearly 40 billion euros to businesses through diverse aid packages including tax breaks and reduced social welfare contributions, there has often been little or no increase in investment in R&D, no significant progress in investment in production and manufacturing activities, or improvement in productivity.
In its bailouts to businesses to compensate for the consequences, notably lockdowns, of the Covid-19 pandemic, a generous protective financial umbrella that became dubbed “le quoi qu’il en coûte” (i.e. rescuing the economy “whatever the cost”), saw even greater handouts from the public purse, and which were made with little controlling verifications. Large French companies have for years been among those who pay the most in dividends to their shareholders, and this year is forecast to see record payments, with those listed on the benchmark French stock exchange, the CAC40, set to redistribute 98% of profits made in 2021. Profits which were in part strengthened thanks to state handouts.
Over the past ten years, Emmanuel Macron, who in 2017 spoke of his ambition to make France “a start-up nation”, has above all reinforced the existing rentiers. Instead of creating its equivalent of big US tech companies, the so-called GAFA (or GAMAM), France has its LHOCK (for LVMH, Hermès, L’Oréal, Chanel and Kering), five luxury goods and fashion groups that dominate its business world and the CAC 40.
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- The original French version of this article can be found here.
English version by Graham Tearse