GM Shocks And Awes France! Workers Surrender!

Yes, there were abortive attempts to rename French Fries to Freedom Fries (you want ketchup with your freedom?) There were calls for a boycott of all things French, including French mustard, excluding French’s Mustard (and maybe the Statue of Liberty.) Nevertheless, I think deep down the Americans secretly admire the French. With their lavish welfare system, generous benefits and their willingness to strike if someone so much as asks them to work an hour outside of their contract, who wouldn’t want to be French?

Hell, in the UK we wish we could be like them. If we were we might still have some global companies in our ownership, instead of selling out to the first bidder. But as Peter Schiff ( who I’ve mentioned before) said, the party is over, we have to stop paying ourselves these lavish benefits, allow the free market to function and stop being lazy. In the UK, the government is going on a massive austerity program in order to balance the books, Italy pushed through a huge €24b cost cutting plan and even Spain just managed to push through a €15b budget reduction plan by a majority of just one vote. France hasn’t made a cost cutting plan of their own. It’s almost as if the current economic turmoil doesn’t apply to them. French benefits have survived recessions before and they’ll survive this one, right? Well, don’t be so sure. It seems that the French may be coming around to the rest of the world’s thinking, and the message to change their ways is coming from an unlikely source. General Motors.

The Washington Post reports that a GM transmission factory in France has made massive concessions in return for job security. For the past few months GM was in the process of negotiations with the transmission factory workers located in Strasbourg. Target: Try to make the factory more efficient (i.e more cost-effective). As you can imagine, the French unions didn’t take too kindly to a bunch of Americans telling them what to do. Cue loads of talks, threats of strikes and re-hashing of what to cut. But after weeks of negotiations it’s over… and the French surrendered (insert your own joke here). 70 percent of the 1150 workers voted to accept the following:

• Axing of their annual bonuses
• Elimination of 6 days’ holiday
• Any salary increases for the next 3 years nixed
• A reduction of 198 workers from the factory (hopefully, via early retirement)

The French got pwned! Now, I know what you’re thinking, “What could have possibly got the French workers to change their minds?” Well, it was classic GM in action. In fact, I’m surprised they didn’t say this at the beginning and save a whole heap of time. They threatened to move production to Mexico. And just like that, the French workers saw the value in making cost savings. What was also bizarre was the choice of words the French workers used to describe this state of affairs.

“Do we have the choice?” asked Jean-Marc Ruhland, a union leader who advocated for acceptance of the concessions, “This is not a victory….but I’d rather take my pants down a little than end up totally naked in front of the employment agency”. Nice image! It does make you wonder where the government was in all of this. Well, they were on GM’s side. You see, Strasbourg has 100,000 people unemployed, they didn’t need another 1,150 more. And herein lies France’s problem. France has been very state dependent for a long time, it’s almost institutional. But now, they’re coming around to private enterprise being the driving factor of their economy, and to do that, they need to be more flexible. The government wants to withdraw from the economy and allow private enterprise to work. This is why President Sarkozy is trying to push through his reforms and is failing. But to give you an idea of how far France has to go in order to get out of state control, consider this little fact. In 2008, government spending accounted for 52.7 percent of their GDP.

GM Shocks And Awes France! Workers Surrender!

Yes, there were abortive attempts to rename French Fries to Freedom Fries (do you want ketchuo with your freedom?) There were and calls for a boycott of all things French, including French mustard, excluding French’s Mustard (and maybe the Statue of Liberty.) Nevertheless, I think deep down the Americans secretly admire the French. With their lavish welfare system, generous benefits and their willingness to strike if someone so much as asks them to work an hour outside of their contract, who wouldn’t want to be French? Hell, in the UK we wish we could be like them. If we were we might still have some global companies in our ownership, instead of selling out to the first bidder. But as Peter Schiff ( who I’ve mentioned before) said, the party is over, we have to stop paying ourselves these lavish benefits, allow the free market to function and stop being lazy. In the UK, the government is going on a massive austerity program in order to balance the books, Italy pushed through a huge €24b cost cutting plan and even Spain just managed to push through a €15b budget reduction plan by a majority of just one vote. France hasn’t made a cost cutting plan of their own. It’s almost as if the current economic turmoil doesn’t apply to them. French benefits have survived recessions before and they’ll survive this one, right? Well, don’t be so sure. It seems that the French may be coming around to the rest of the world’s thinking, and the message to change their ways is coming from an unlikely source. General Motors.

The Washington Post reports that a transmission factory in France has made massive concessions in return for job security. For the past few months GM was in the process of negotiations with the transmission factory workers located in Strasbourg. Target: Try to make the factory more efficient (i.e more cost-effective). As you can imagine, the French unions didn’t take too kindly to a bunch of Americans telling them what to do. Cue loads of talks, threats of strikes and re-hashing of what to cut. But after weeks of negotiations it’s over….and the French surrendered (insert your own joke here). 70 percent of the 1150 workers voted to the following:

• Axing of their annual bonuses
• Elimination of 6 days’ holiday
• Any salary increases for the next 3 years
• A reduction of 198 workers from the factory (hopefully, via early retirement)

The French got pwned! Now, I know what you’re thinking, “What could have possibly got the French workers to change their minds?” Well, it was classic GM in action. In fact, I’m surprised they didn’t say this at the beginning and save a whole heap of time. They threatened to move production to Mexico. And just like that, the French workers saw the value in making cost savings. What was also bizarre was the choice of words the French workers used to describe this state of affairs.

“Do we have the choice?” asked Jean-Marc Ruhland, a union leader who advocated for acceptance of the concessions, “This is not a victory….but I’d rather take my pants down a little than end up totally naked in front of the employment agency”. Nice image! It does make you wonder where the government was in all of this. Well, they were on GM’s side. You see, Strasbourg has 100,000 people unemployed, they didn’t need another 1,150 more. And herein lies France’s problem. France has been very state dependent for a long time, it’s almost institutional. But now, they’re coming around to private enterprise being the driving factor of their economy, and to do that, they need to be more flexible. The government wants to withdraw from the economy and allow private enterprise to work. This is why President Sarkozy is trying to push through his reforms and is failing. But to give you an idea of how far France has to go in order to get out of state control, consider this little fact. In 2008, government spending accounted for 52.7 percent of their GDP.