FRANCE: Mercedes distributors voice major layoffs fear if Paris blockade continues
France's Mercedes-Benz distributor grouping is warning it may have to make up to 1,500 staff partially redundant if the refrigerant stand-off between Paris and the German automaker continues.
The row concerning the French blockade of Mercedes' cars using r134a refrigerant as opposed to the European Union (EU) recommended r1234yf variant, has now led to 5,000 customers being unable to receive vehicles and the issue soaring to the top of political in-trays.
"This [r134a] gas is used by 95% of car manufacturers - in my personal opinion it is a settling of accounts between France and Germany," Groupement des Distributeurs et Reparateurs president, Jean-Claude Bernard, told just-auto from his headquarters in the northern French city of Le Mans.
"We have 5,000 vehicles blocked at the moment. [Some] 60% of our expenses are salaries - if this situation lasts we will be obliged to make some people go to partial unemployment - maybe 10%-15% - [we employ] 11,000 people in France which [means] 1,500 at risk of unemployment."
The distributors group president added he felt the move by the French government smacked of protectionism, given the overall domestic market had dropped around 22%, in stark contrast to its German counterpart that had grown 6%.
Mercedes had received some good news last week with the Tribunal de Versailles ruling certification of cars using r134a refrigerant was allowed and registration of the automaker's A, B and CLA models should start.
However, this decision was overruled by France's Environment Ministry, which invoked Article 29 of the EU air-conditioning directive, allowing Members to refuse vehicle registration for six months where a risk to the environment was involved.
For its part, Mercedes counters the EU alternative r1234yf refrigerant can be highly flammable in certain conditions.
"We have had no contact at all with politicians," said Bernard. "This is why we sent [a] letter to the Minister to put a bit of pressure on the situation - we as French distributors pay taxes and employ French people.
"I think a compromise will be found by legal means - there will be in the days to come a new action from Daimler to force the French State to lift this measure."
The Environment Ministry conceded the Versailles Tribunal had suspended the initial blockade, but added: "In parallel, the French State reserves the right to have an appeal against that.
"This is do with Article 29, which authorises a Member State to refuse for six months maximum a vehicle that goes strongly against the environment."
The vehicles affected represent 50% of Mercedes sales in France and although there is a natural delay of three to four months in deliveries due to normal backlog, the distributor president noted orders were currently down 20%.