Renault’s establishment of a factory in France’s former colony of Morocco has drawn ire from union officials and industry in the sort of election year politicking that wouldn’t be unknown to Americans. The language and culture may be different, but the theme remains the same; good jobs in the manufacturing sector are leaving the country, and they aren’t coming back.
Renault’s Dacia brand is having a good run in world markets, and achieved a bit of notoriety when Top Gear’s James May professed his undying love for the Dacia Sandero compact hatchback. Renault has even gone as far as killing off half of their UK lineup, replacing the missing vehicles with Dacia cars instead.
A factory in Tangiers, Morocco was established to help build the new 7-seater Dacia Lodgy minivan, which will cost half as much as its Renault equivalent, the Scenic. The plant will also build a replacement for the Logan, and will be able to produce as much as 400,000 cars annually. Renault CEO Carlos Ghosn denied that the Lodgy would cannibalize sales of the Scenic, but the plant’s announcement seems to have struck a nerve in France.
Dacia’s are currently built in Romania, an EU member state, where workers earn 450 euro per month. While a French worker in a Renault factory earns about 1,800 euro, employees at the Moroccan plant will only take home ,250 per month. One columnist in French paper Le Dauphiné Libéré noted that Moroccan workers won’t even be able to buy the cars they produce with that wage. But the Tangiers plant is right near a major port, and Morocco, a relatively poor country will benefit from the 6,000 jobs added by the plant alone.
Meanwhile, Europe is in the throes of an economic crisis with the potential to destabilize the entire continent – and France, along with Germany, are doing the most to bring the EU out of its tailspin. France is in an election year, with Socialist leader Francois Hollande making headway against current leader Nicolas Sarkozy. Not surprisingly, union leaders are giving the government (a 15 percent stakeholder in Renault) some merde royale. ”We see this factory as a dangerous development,” said Fabien Gache, head of French labor union CGT. ”These vehicles are basically…[Dacia branded] Scenics and Kangoos,” Gache said. “They’re bound to hit the Renault brand’s market share.” Even a former cabinet minister for Sarkozy has accused Renault of “social dumping in Morocco“.
Renault is estimated to produce 30 percent of its vehicles in its home market of France. Working in a Renault factory and taking advantage of the French welfare state’s generous benefits used to be a ticket to a solid middle class life in France, but the rise of “l’hexagone” (Dacia) in favor of “le diamant” (Renault) represents a symbolic threat to a former way of life that came to be seen as a birthright in not just France but much of Europe. Ghosn went as far as to say that he never even dreamed of building a Dacia factory in Western Europe, as it would be incompatible with the idea of a “low-cost” vehicle. The Dacia Duster is a major success in France, but it could never be built with workers earning 1,800 euro a month and taking 5 weeks paid vacation. Dacia’s market share has risen as Renault’s has fallen – and why wouldn’t it when the economy is in a toilet, and one can buy a Renault-engineered vehicle for half price compared to the “brand name” version?