By on February 23, 2010


In these times of bailouts, stimuli and protectionism, it’s probably a good time to remind ourselves of the basic tenets of capitalism. In short, let the free market run free and things will adjust themselves. Or so they say. If factory costs are too high, you either cut costs or move to a place that has lower costs. This is why Eastern Europe is so popular for European manufacturing companies. Cheap labor, low overheads and no tariffs due to EU membership. However, as I said earlier, when a free market is allowed to be free, things will adjust. And adjust, they have.

Reuters reports that Renault is fuming at Slovenia because Renault believes that electricity prices and labor costs are way too high in supposedly low cost Slovenia. “A comparison of electricity costs among factories in the Renault group shows that we are among the most expensive…” So seethed Ales Bratoz, Chief Executive of Revoz, Renault’s Slovenian unit.

To make matters worse, the Slovenian parliament had the temerity of rising the minimum net monthly wage by 22 percent to €562 ($766). “As a consequence, labor costs are expected to rise on all other wage levels, as well,” Bratos protested.

Now we know why Renault, in January, threatened to halt Clio production in Slovenia. Or not? We’ll get to that in a second. The cost concerns could cause complications with Renault’s agreement with Daimler where “low costs” were one of the main motivations for the ménage.

Or is this all a smokescreen under which to get a Clio back to France? Without giving Brussels ideas that it’s trying to help itself to lovely French taxpayers’ money? It sure sounds that way. Minimum wage in France is €1,344. And no proud French unionized metal worker would work for minimum wage without setting the plant on fire. Now, let’s check that electricity bill.

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13 Comments on “Renault: Slovenia Sucks (Money)...”


  • avatar
    Boff

    Key phrase: “or so they say”. Irony alert: State-suckled Renault being feted as an avatar of capitalism for having a hissy fit about Slovenian government meddling. John Galt, Renault is not.

  • avatar
    kitzler

    Germans know how to build cars, the French definitely don’t. All he French wat is to sell inferior products, read cheap products, using a French name for cachet (image). I mean the US virtually voted the French out with their pocket books, the Renault and Peugeots just did not sell here. To prove my point, one example: I once rented a Renault Fuego in the States, the car wash had left he radio on full blast, and the radio volume did not work until the ignition was on. So I turned the ignition on, but could not reach the volume control because the automatic stick interfered, so now I had to listen to the radio, while starting the car so that I could moe the gear shift back far enough to reach the volume control. Talk about French human factors!!!!! So again, why even consider anything French… correction, they do make good cheeses….

  • avatar
    porschespeed

    kitzler,

    While it’s hard to argue much for Pugs, you really should drive a Renault R5 Turbo, a Citroen DS21, and a Citroen SM (half Cit, half Maser) before completely indicting the French.

  • avatar
    kitzler

    Porsche “Geschwindigkeit” speed,

    To answer your comment, I have driven French, but my Renault fell apart after 25,000 miles, the only one I liked was a Citroen 2CV, back in the sixties. The Clio I rented a couple of years ago was so flimsy, I thought it would fall apart before I returned it to Hertz, yes they drive fine, but for the rest, Auf Wiedersehen! Give me a Beemer, VW, Audi or treat me to a Mercedes! They never fall apart!

  • avatar
    Martin Schwoerer

    kitzler, what on earth compelled you to select a moniker that means “clitoris”? I mean I appreciate your understanding of the female anatomy, but imagine a dialogue between you and a certain fellow who would log in as “schwanz”.

  • avatar
    kitzler

    Very few people speak German, I am not German, just admire the language and its people, by the way Kitzler also means Tickler, I am glad I can tickle people’s fancy. Auf Wiederhoeren Martin Schwoerer aka the swearer,

  • avatar
    kitzler

    you mean like Schwager Martin, I could have sworn schwoeren bedeutet to swear, so naturally a Schwoerer would be a swearer, of course Martin, I never studied dialect German, just Goethe’s German, dialect was always very hard for me to understand.

    But we are on a car subject, so I could never fathom why a German would buy anything but a German car, then I saw some German friends buy a Renault Nevada station wagon, why, because they needed the room for their big dog and because they got a great deal, the Nevada was cheaper in Germany than in France.

    I later met some French people who admitted to me, that when France sells turbines, cars, locomotives, etc for export, they invariably lose money… they do make up their losses largely because of economic patriotism; a French person will always buy French, even if it is more expensive, that’s the nature of the beast. An American will do the opposite, unless he’s been burnt, look out Toyota and Nissan.

  • avatar
    ra_pro

    Some years ago I was on training in France. I had a French colleague assigned to me and he always used to say that there were just too many German cars on the roads in France. So once half-jokingly I asked him what his next car would be. The next car, he already told me would be new, not some old junk like he’s been driving for the last number of years. With straight face he told me he was looking at German cars, it would most likely be a German car. Not a hint of irony in his voice.

    But overall my impression of the French improved 10-fold while there. Very bright people, working very hard (when not on holidays); hardly anybody went home before 6PM and most after 7PM though they did get to work a bit late, usually between 9 and 10 AM. French do almost everything really well except perhaps cars. But it`s not that they are not technically inclined because, I do believe they export a lot of machinery but probably not as much as Germans or Italians.

  • avatar
    MadHungarian

    Sooo, the fact they are bellyaching about the hike in the Slovene minimum wage means Renault is paying its Slovene factory workers MINIMUM WAGE?? Egads!

  • avatar
    Znork

    It’s good to see Slovenia is catching up to the western quality of life, let’s hope their eastern neighbours also get there soon (I’m mainly thinking about Romania and the Ukraine (altough Tymoshenko seem to have a hard time grasping democracy).

  • avatar
    fred schumacher

    France abandoned the U.S. market, but before they did, I owned two 1969 Simca 1204 GLS, a hatchback and a wagon. This is the car line that was imported by Chrysler and formed the basis for what was to become the Horizon and Omni, the vehicles that began the transverse engine/front wheel drive revolution in America.

    The Simca was far and away a better car than the contemporaneous VW Beetle: safer, faster, quieter, more stable, more room, better fuel economy. It had comfortable seats, long suspension travel, and I could go down North Dakota’s gravel roads at 70 mph straight as an arrow. After the Simca, I never wanted to go back to front engine/rear wheel drive again. I still have all three of my Simcas (one was parts car) parked out at the farm.

    Slovenia is only marginally an eastern country. It really belongs to the West. Those of us, like myself, who are Germans of Balkan origin, consider Slovenians to be Austrians who speak a Slavic language. Culturally they are much closer to German speaking Austrians than to any Slavs in the Balkans. Even their swearing is more similar to the Germans rather than South Slavs, who are masters of the art.

  • avatar
    kitzler

    To make great cars you have to love cars. The french used to love cars, witness the Hispano-Suiza (not Spanish) or Delahaye of yore, but that love became commercialism after WWII, anything for a buck, a Franc (excuse my French). The Brits also loved cars but they got lazy and let the Japanese, first Honda, start manufacturing their prized automobiles. Enter the Germans, who like the Swedes always loved a car, sometimes more so than their wives (old joke), in other words Swedes and Germans have a passion for their autos. That passion translates into a technically superior vehicle, except where software is involved, for some reasons the Europeans have a hard time with it, maybe because the original software language is English.

    At any rate, if you don’t live and breathe cars, you’ll never make a great cars. In America, young people used to love cars too, but that came by the wayside, when commercial shops started to do tuning, instead of the kid with his toolbox. Still, some youngsters are quite adept at tuning a vehicle using their PC, read without getting their hands dirty.

    why would anyone buy a French car, I think because they just want a bargain, or they just don’t feel passionate about them, or both. As far as the Slovenes, it is a trade-off between being exploited by the West, in exchange for jobs, or just not being passionate enough about their vehicles. Still the Czechs used to make great machinery, so not making their own cars is definitely not a cultural discrepancy.

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