move industry to France, impossible task?

The demands to move industrial production have been multiplied since the inception of the Covid-19 pandemic to reduce dependence on Asian countries. But implementing it is difficult, as illustrated by car manufacturer Renault, which will reduce jobs in France.

Faced with the Covid-19 pandemic, the globalization of the economy, which has worked for 30 years, has shown its limits. The Coronavirus epidemic has raised awareness of France’s dependence on emerging economies and, in particular, its impact in times of crisis.

Often seen as a sovereign fashion fly is the issue of a strategic relocation of industries forward in public debate, while the time is ripe for reflection on the “next world”. However, the case of Renault shows that the relocation of industries to France is far from winning. Rather, the plan announced by the CEO on May 29 is moving towards strengthening the relocation of production.

President Emmanuel Macron, a strong defender of France’s integration into economic globalization, hammered him at the end of March: “We must produce more in France, on our soil. The next day will not be like the day before, we must rebuild our national and European sovereignty. “

Even Medef, the employers’ union, defends the idea. In his recovery plan presented on May 28, he said he wanted to “initiate a targeted relocation policy for strategic industries in France and Europe, with health as a priority”.

Within the vehicle field, a first test for the government

The government wants to link its economic recovery plan with the relocation of industries. With the car industry, badly affected by the Covid-19 crisis, he passed his first crash test. In return for support from the French state to the € 8 billion granted to the sector (including $ 5 billion for Renault without increasing its share in the former management’s capital), Emmanuel Macron asked for “a series of strong commitments that consist in moving value added France and consolidate and maintain industrial production on our sites. “

However, despite the good intentions of the government, Renault, one of the French flagships, announced on Friday, May 29, that almost 4,600 jobs in France, of 48,000, were abolished as part of a $ 2 billion savings plan. euro for three years. Employees at the factory in Maubeuge (North), where the car manufacturer manufactures Kangoo power tools, immediately went on strike when production was to be transferred to Douai, 70 kilometers away.

If Emmanuel Macron conditioned his support plan for the manufacturer to guarantee to employees, the case of Renault underscores the difficulty of implementing a massive relocation policy that runs counter to decades of French deindustrialization.

Defend the existing

This is a point emphasized by the economist, Nathalie Coutinet, lecturer at the University of Paris13, in another area where Covid-19 friends highlight the risks of dependence on Asia in terms of deliveries: health.

“Before we talk about relocation, let’s first try to preserve the existing industrial fabric,” explains Nathalie Coutinet, who specifically mentions the Famar plant in Lyon, which manufactures Nivaquine (chloroquine sulfate) and Largactil (chlorpromazine) drugs that are currently being tested against Covid. 19th In receivership since June 2019, the latter is still waiting for a buyer.

>> Read also: Covid-19 pressures France to move its pharmaceutical industry

“We need to stop this mass shooting game, which consists in only taking into account the shareholder value of the laboratories and not their general benefit,” Nathalie Coutinet urges.

The government has been completely contained on the health front to enable the return of mask production in French territories. Indispensable for dealing with the pandemic, the masks have been the symbol of French dependence, especially on China, which is the largest manufacturer.

Relocate or re-industrialize?

Louis Gallois, chairman of La Fabrique de l’Industrie and chairman of PSA’s supervisory board, also warns at BFM: “I, I’m talking about re-industrialization,” he emphasizes. “This is what matters. Moves must be seen on a case-by-case basis.”

For the business manager, the health, food and digital sectors remain where French industry retains assets and opportunities. But he is much less optimistic in other sectors: “For some industries I do not believe in it, it is true,” he explains, noting that it is not uncommon in the car in some countries that local production is required to enter the market.

“Complete relocation of production processes to the national or regional level poses problems with rising production costs and a lack of local expertise,” also claims the credit insurer Coface in a banknote. “Even if these two problems were solved, this new local production process would still depend on the raw material supply, which is still very limited by their location.” In short, a clean and perfect relocation does not exist.

This cost increase is likely to increase the prices of products with relocated manufacturing. However, the French may never have been so ready. According to a new survey, no less than 89% are for (including 47% entirely), “even if it increases” the cost of products for consumers. A significant increase compared to before the pandemic.