I took much more of an interest this weekend in watching France’s annual flexing of military might on Bastille Day down the Champs Elysées in Paris.
Thanks to the France 24 television station beamed to the UK, I could see the country’s newly-elected President Hollande take the salute as myriad tanks, horses and even two Typhoons from our very own Royal Air Force, thundered down the iconic avenue.
Go deeper with GlobalData
But what was on Hollande’s mind, behind the rather fixed smile? Could it have been the news which, according to one French union, “resonated like a thunder clap” across the country at the end of last week as PSA Peugeot Citroen announced a huge raft of up to 8,000 job cuts in addition to 6,000 redundancies previously announced?
The new President has only had his feet under the Elysée Palace’s desk for a matter of weeks but is now presented with an unemployment headache of monumental proportions – in addition to several other announcements of large-scale job cuts – as France struggles with rising unemployment, plunging consumer confidence and the ever-present problem of how to pay off its huge public debt.
Speaking in the ornate splendour of France’s Defence Ministry – the Hotel de Marine – overlooking the majestic Place de la Concorde on France’s big day – Hollande pronounced himself ‘shocked’ and insisted he would not accept PSA’s proposition.
“This current plan is not acceptable in its [current] state, so it will not be accepted,” the President said. “It’s a shock. A shock for the staff who are coming to terms with the scale of it. It’s a shock for the towns concerned – Aulnay and Rennes. And then it’s a shock for suppliers who we often forget, lots of businesses of all sizes in the automobile industry. Can the state stay indifferent? No.”
US Tariffs are shifting - will you react or anticipate?
Don’t let policy changes catch you off guard. Stay proactive with real-time data and expert analysis.
By GlobalDataWell, all well and good, but the President may well be playing politics here and throwing a sop to France’s militant unions, who, are already mobilising both individually and collectively to deliver huge protests to the newly-elected Head of State and his left-leaning Parliament.
A quick diversion to those same suppliers Hollande mentioned. I rang both Valeo and Faurecia, two giants of the French and global supply world – and not a peep out of either of them.
Faurecia obviously has a huge interest in what PSA does given its close relationship with them and indeed PSA’s shareholding in the supplier, but nothing was forthcoming – both are keeping their cards close to their chests.
But back to that “shock.” Just how much of a “shock” can it really have been for Hollande? Rumours PSA was about to wield the axe have been circulating for months and even though the enormous jobs cuts were held back until after the French Presidential elections – that didn’t help former incumbent Nicolas Sarkozy much – it’s perhaps the scale of the job losses that has stunned France so much.
Just how far the new lodger at the Elysée’s Palace’s hands are tied can be summed up by Hollande’s rather plaintive Bastille Day insistence there were three things “everyone should bear in mind” when it came to his ability to help PSA.
“First of all the debt,” he said: “90% of the national turnover is public debt – an historic record. Second, unemployment: 10% of the population today is looking for work. And the third figure: the deficit in our external trade – EUR70bn.”
But Hollande comes from the left – not only has he just been elected with a resounding majority – so have his left-leaning MPs – who arrive with a mandate many see and wish is radically different from his market-based predecessor. Hence this also on Bastille Day:
” I’ve got great respect for businesses that are struggling. Now, if there have to be reforms, we will do it on based on fiscal elements that are just.
“So for me, my duty, it’s jobs, it’s economic regeneration and it’s also the re-establishment of public finances.”
That encapsulates Hollande’s dilemma – the rousing tub-thumping of the hustings when perhaps easy words come all too quickly have been quickly replaced by the cold light of day as the dilemma of what to with PSA – what can he realistically do? – hits home.
French unions took great heart from his and his deputes’ recent triumphs at the ballot box. But if those same unions, who even now, are plotting their responses to PSA’s drastic pruning, think Hollande is going to deliver some far-left command economy solution to ease job cuts, they are living in cloud cuckoo land.
Hollande was recently nicknamed “rainman” by the British press as his first two months in office have been plagued by torrential downpours – with even lightning striking his aircraft on his first visit to – of all people – Angela Merkel in Berlin.
He even managed a wry remark as he visited a – rainy – UK recently. “I’m coming to London in typically British weather that we’ve known in France since my election,” he said.
Rainman indeed, but of all his Bastille Day utterances at the weekend, it’s the President’s solemn intoning of the need to ‘re-establish public finances’ that could yet rain hardest on the unions’ parade.
