French Car Troubles

The French automotive industry is in trouble. This headline seems to be the same for the past 50 years, but here we are in 2012, and it made the front pages again.

The main symptom? The closure of Peugeot-Citroen’s flagship factory in Aulnay-sous-bois. This is causing uproar in France, as it means the loss of 9,000 jobs and the literal disappearance of a whole city. The government even claimed they would get involved and bring the Guillotine out.

This is not new however, and you may call me a pessimist, but the plant will close down and we will forget about it, until the next one.

It happened to Renault before, in the early 90s, and it had caused uproar. Now, they defiantly use the “Made in France” label, which is mostly a lie. They even go to say that they are successful, and better-off than Peugeot. Oh the lies…

Renault, as we all know, is not just the one company. Its biggest asset is Dacia, and that is working well, very well in fact! One of the reasons Renault seems well off, is because of Dacia’s success. Carlos Ghosn may say it’s their electric car venture, but that’s as true as Justin Bieber’s talent. The fact is, Dacia is pretty much keeping Renault alive. Just look at Renault UK: No more Espace, Laguna, Wind, Kangoo, Koleos; yet the Dacia Duster is coming along, and selling. Dacia are low-cost Renaults, built outside of France, sold for cheap, and as a result, they sell. Renault made a lot of pomp and circumstance for the latest Laguna, using words such as ‘refinement’ and ‘quality’. The result? Kind of a flop.
It has come to the point where Dacia models are indirectly replacing Renault ones. Look at the Koleos and Duster, the Lodgy and the Espace. Need I go on?

But everything is okay, Renault have the Tweezy…..

The problem is not due to the cars themselves, it pains me to say. The biggest issue can be explained with the French education system.

You see in France, when you choose to go in to business studies, you do not choose what industry you would like to work in, rather you choose the position you want to hold. If you want to be a CEO, you need very rich parents, who will pay for your insanely expensive education, study 24/7 for about ten years after high-school, and then you can get that position.

Once there, you can be swapped from company to company, regardless of the industry. What counts is the schools you attended, and who you know. It doesn’t really matter if you are good or not.

That is the problem with Peugeot. The current CEO, Philippe Varin came from the steel industry, and joined Peugeot as its CEO straight away. How can he be expected to successfully run a company, if he has no experience in the industry? It was the same for the ex-CEO of Renault, Louis Schweitzer. He was a lawyer, who then went into the French Treasury, then became COO and CEO of Renault, to finally be part of a failed coup d’état in a French energy company, Veolia, with Jean-Louis Borloo, a French politician. (guess what, he was going to be CEO).

Call me old fashioned, but I believe in working to achieve a position, not just getting to it the easy way. The automotive industry is a very complex system. Some gambles pay off, most fail. This will sound corny, but to understand it, you have to be a car guy. (It is not just in France that there is this problem though; look at Dany Bahar and Lotus).

That is one of the reasons companies like Toyota, Honda, Volkswagen or Mercedes-Benz are doing so well. Look at their CEOs:
-Akio Toyoda is a car nut, he regularly races on the Nurburgringe, and launched the GT86 and Lexus LFA
-Takanobu Ito used to be an R&D engineer for Honda back in 1978. He worked on the original NSX, and plans to relaunch the new one.
-Martin Winterkorn worked almost 20 years for Volkswagen before becoming CEO. His predecessor engineered the Veyron. The guy before him was Ferdinand Porsche’s grandson.
-Dieter Zetsche joined Daimler in 1976, and was responsible for Mercedes-Benz rebuilding quality motors, regardless of cost.

I mean it is simple; for the company to be successful, it needs to make appealing products. If the CEO is involved, every detail will be taken care of and a realistic vision will be followed. If the CEO is not interested in cars, how can you expect them to properly guide a car company? Look at Dany Bahar and his rap stars. When he presented those 5 concepts at the Paris Motor Show, it was almost as if he had no idea how a car company works. And when he claimed to go after Ferrari and Porsche, every current Lotus owner launched a Jihad on him.

That is the problem in France, the bureaucracy. Carlos Goshn says he has the answer to the car industry’s worries with his Tweezy. Seriously, who is buying it? And the Fluence? He should realise that one of the reasons people buy a car is for mobility… In the city, yes, but outside, there is no market. And he did not only take Renault there, the Leaf was one of his bright ideas, and that is a roaring success. Peugeot are bad enough with their 508 Hybrid Diesel. But hey, the government has their back with special incentives for hybrids and electric cars. (the fact that 90% of hybrids are not French has not occurred to them yet).

Personally, this short-sightedness is scary. When the French government launched the ‘cash for clunkers’ scam, Peugeot and Renault swarmed the market with cheap small diesels, forgetting about everything else. Now that the scam, sorry I mean scheme, has finished, they are crying because they are not selling their cars. So the government gives them another scheme to artificially boost sales.

Where is the long-term in all this? After all, French CEOs know that they could be head of another company with one phone call to their politician buddies, so why bother?

That said, it is not the only problem for French manufacturers. A lack of international vision, ridiculous unions and failed attempts to raise their image only lead them deeper in the precipice.

R.I.P Louis Renault, Armand Peugeot et André Citroën
R.I.P French Automotive Industry

Disclaimer: I hope I am wrong, for once…

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About justdrivethere

Automotive enthusiast, Travel seeker, Whisky aficionado
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One Response to French Car Troubles

  1. Pingback: Sergio Marchionne, or how not to lead a car company | JustDrive There

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