By on July 15, 2012

Newly elected French socialist President Francois Hollande told GM’s partner PSA Peugeot Citroen to renegotiate a plan to lay off 8,000 workers. However, Hollande admitted he could not halt Peugeot. Hollande promised government money to “encourage consumers to purchase French-made, environmentally friendly cars,” Reuters reports. Soon he will admit he cannot do that either. The “French made” part is sure to get his government in trouble with the EU.

According to the report, Hollande ruled out another round of cash for clunkers. The past one, introduced during the 2009 financial crisis “had cost the taxpayer dearly and had often been spent on foreign-made vehicles,” Reuters quotes Hollande.

Bloomberg reports that the French government will “announce measures on July 25 to boost French car sales and prop up the entire auto sector.”

No details on the support plan are available.  “We will create a plan which costs as little as possible to the taxpayer and is as effective as possible,” Reuters quotes Hollande. Any attempts to favor one EU partner’s industry over other countries is sure to attract the attention of Brussels. Brussels is keeping an eye on Paris, due to past episodes of support for the French by the French.

Ignoring Brussels, at least initially, is a well-known populist ploy in Europe. When Brussels complains, the populists can wring their hands, blame the grinches in Brussels, shrug, and continue as if nothing happened.


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23 Comments on “France’s Socialist President Offers “Buy French” Plan...”

  • avatar

    In my years of watching the EU I’ve learned that: Greece, Portugal and the likes do whatever they’re told; Spain has a very small margin of ‘independence’; Italy gets away with almost everything they want; France and Germany nod with a stern face whenever Brussels calls then go about their business.

    Let’s see if this time is different. I wouldn’t hold my breath however.

    • 0 avatar

      As Bertel said, the EU will prevent any such support, but it works out well for the government as they can say “we really would have helped but the EU is preventing us from doing so” — and still avoid spending any money on the program.

    • 0 avatar

      Greece committing fiscal fraud for decades sort of flies in the face of that theory, as does the fact that neither greece nor portugal has implemented the ordered austerity measures they agreed to. They are however keen to appear as they are playing by the book, as subsidies from the EU (or rather the more well managed and prosperous countries) is a considerable source of “revenue”.

  • avatar

    There are hard lessons to be learned in all of the lofty Agreements. NAFTA has destroyed the auto business in Canada, and hasn’t done a lot for the U.S., either. Now our Prime Minister is eagerly trying to sign away the rest of the farm to Asia with a Pan-Pacific agreement.
    Lesser ‘partner’s are lured into these deals with idealistic promises of unfettered access to much larger markets. In truth, tiny countries (Portugal & Greece, for example) don’t have much choice. A market of 10 million has zero chance of surviving on its own.
    However, there are warning signs everywhere. David & Goliath can rarely co-exist happily. Even the U.S. and Canada, despite sharing so many common values and cultural history, has mixed results in business dealings.
    China, Germany and Japan have done very well for themselves at the altar of Globalization. The U.S., Great Britain and others, not so much.
    If Canada did not have trees, oil, uranium and potash to hock, we’d be lining up right behind Portugal and Greece. France is in a tight spot. For a country with such a horrible historical track record, they are a proud people. It must irk them to no end to watch Britannia kick their a$$es for the past 400 or so years. Now they have to deal with those horrid ‘huns’ and their market onslaught.
    Oh, well – we do live in interesting times. The West’s death throes are likely to be painful for those of us in the middle of it.

    • 0 avatar

      Destroyed the automotive industry in Canada? Really? Based on current data, over 2.5M light vehicles will be built in Canada this year, and that’s about 50% more than the sales number, meaning that net exports are over 800K units.

      It’s just a flesh wound, as the black knight said … if even that.

    • 0 avatar

      Gov intervention helps, but it can’t do it all. Right now, in Brazil, because the gov raised taxes for imports (relatively to ‘domestic’ cars) and lowered for locals we are now in the middle of a gold rush. For the makers that is. Also for their workers I guess ’cause the threat of mass layoffs has been averted for now. There is also noise that Brazil won’t have to be the land just of compacts. When the free trade agreement with Mexico and Mercosul was working its ‘magic’, Brazil was being reduced to a maker of compacts that just we (and our neighbors) consumed. The gov forced the situation and now BMW is setting up shop and Fiat has started to ‘nationalize’ the Freemont.

      I guess that a little gov prod from time to time can be good. Of course, there is a (higher) price to pay for the consumer. And if it lasts too long bloat and utter inefficiency can arise. But if we let the makers have their way all we’d be able to buy would be local Gols and imported Pssats. Not so good. Also, like in US, by protecting the worker you guarantee some money in the economy. I wonder how many imported Passats VW would sell if all of us worked in services selling hamburguers to each other?

    • 0 avatar

      NAFTA has not seemed to hurt the Japanese transplants in Canada so what you must have actually meant to say is that “NAFTA has destroyed the Canadian Auto Workers Union…”

      The tragedy is that this statement wouldn’t have been correct either.

      NAFTA just meant that cars (and car parts) that would have been made in China are now being made in Mexico. Either way the CAW would have lost jobs.

      Now because union wages and CAW induce workplace inefficiencies it’s actually become cheaper to manufacture in places like Ohio and Indiana.

      And in the end that’s what is going to finish off unionized auto manufacturing in Canada. There is nothing done in Oshawa, Oakville or Windsor that can’t be done in the American mid-west – by UAW members no less.

      • 0 avatar

        Neither Toyota or Honda would have opened in Ontario if not for the Auto Pact. NAFTA wiped that out. You don’t see Hyundai or Nissan clamoring to open here, do you?
        Over 100,000 parts jobs have disappeared in Ontario since 2001. Even Toyota’s hiring doesn’t come close to how many GM and Ford once employed here.
        I am not a union supporter: I can see how destructive they are in the public service, but if we want a certain standard of living, nobody can compete with labor costs in baby making states like China or Vietnam. And a ‘small’ country like Canada cannot sustain giving away pieces of itself in exchange for value-added goods.
        This piece does not need to degenerate into another anti-union diatribe.

      • 0 avatar

        Counting just the number of jobs will give you the wrong picture as ALL manufacturing is far more automated now than it was 20, 30 or 40 years ago. Even if every single part that was made in Canada were still to be so, I would expect automotive sector employment to be down by 40-50% since 1980 due to automation.

  • avatar
    The Doctor

    Hollande’s presidency is hilarious – he’s having to row back on every single promise he made on the hustings.

    • 0 avatar

      He looks like an inexperienced politicians that way. An experienced politicians would have some good sense of what is possible and what is not, and do not just open his mouth promising things which later turned out to be impossible.

      He’ll soon earn the nickname “Blabbermouth”! ;)

    • 0 avatar

      You mean some French people makes promises and then never intend to keep them? Wow. I for one am shocked…
      It’s the French way. Say you will absolutely, definitely do something, then a few months later ignore it completely. The French media won’t take him to task, and dare say neither will the French public.
      This is just more bluster and promises and then it will all be forgotten.

  • avatar

    Even the U.S. and Canada, despite sharing so many common values and cultural history, has mixed results in business dealings

    The Free trade just about did us in, suddenly overnight most manufacturing either went t*ts up or moved south. If werent smart enuf to devalue our $ we would have been doom. Thank God the change helped us again, or else we’ll be lucky to get $50 a mth for our govt pension cheque!
    well dealing with Uncle Sam is never easy, not too long ago our soft wood lumber.
    Atleast Middle kingdom do have some mulla to buy our oil. Then selling raw oil is not a very smart choice, why didn’t we process it, and we get to charge the labour in doing it?

  • avatar

    “Costs as little as possible and is effective as possible.”

    Worthless. Literally worthless. What a stooge.

    • 0 avatar

      Says nothing really, just feel good happy talk, its opposite bookend usually turns put as: “cost more than planned, did less than desired.”

  • avatar

    You are selling crude, because no one wants a refinery in their back yard and the oil companies don’t figure its worth the fight. The newest refinery in Canada is from 1978. The oldest dates back to 1897.

    Even goofier is that most of the refineries in the above link are using foreign crude when there is Canadian crude available.

    But, not a lot different than Alaska crude being exported.

    (this was in response to blowfish)

    • 0 avatar

      Foreign crude is likely to be used due to extraction or transport (crude from the field or refined to the customer) costs, or the chemical nature, I.e. hi sulfur, of the crude.

  • avatar

    No surprise.

    Everyone in the EU is equal except some are more equal than others.

    Germany and France have always thought that because they were part of the original six countries that started the EU they could run it as they pleased.

    • 0 avatar

      Or the fact that they are the most powerful economies. You don’t hear all that much about posturing from the Netherlands, Luxembourg or Belgium. What Italy is up to has so far been indecipherable, as almost all things in Italian politics seems to be.

  • avatar
    Ron B.

    GM… In Australia it pulled exactly the same stunt.. ” We will lay off workers and threaten to close plants unless you give money in the form of subsidies “. Ausralia’s communist labor government capitulated two years ago and just a few weeks ago, GM was once again at the governments door,with much wringing of hands and cringing it was again asking for money . if governments do not play GMs game ( which it has been playing since post WW2) they will ‘do a Saab’ and simply walk away.
    France built some of it’s greatest cars with world leading design and value under socilaist government leaders. Getting rid of GM and it’s top heavy style of managenmt will possibly see a return to cars that people really want,not what GM thinks they want.

    • 0 avatar

      Sorry, if you think the current Australian government is “communist” (didn’t that die over twenty years ago?) you don’t actually seem to know much about politics here. This is like calling Liberal and National parties “fascist”. The reality is that conservative parties are just as likely to prop up companies here as left wing ones, despite a lot of populist rhetoric about competition

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