Speaking Truth to Stupidity

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An amusing incident occurred recently in France, which not long back elected a Socialist government — an incident so amusing it warrants noting.

As reported in the Wall Street Journal, an American tire company — Titan International — was looking at possibly taking over Goodyear Tire & Rubber Company’s unprofitable French factory in Amiens. Maurice Taylor, Titan’s CEO, visited the factory late last year to assess the economic viability of the proposed acquisition.

Taylor looked the place over and wrote an interesting letter to the French Industry Minister Arnaud Montebourg, explaining why he was not going to pursue the deal — a letter that caused a hysterical reaction in a government much given to hysteria.

In his inspection of the plant, Taylor found that the communist-controlled union was totally obstructive to all the changes needed to make it profitable, including such mundane steps as requiring workers to work put in longer hours and permitting target layoffs of unneeded staff. He found that the highly-paid union workers were working only three hours a day on average. Worse, the workers were demanding that Titan guarantee all their jobs for a minimum of seven years.

In his letter to Montebourg, who had contacted Taylor in January to see why Titan wasn’t pursuing the failing factory, Taylor replied, “Sir, your letter states that you want Titan to start a discussion. How stupid do you think we are?” He went on to say, “Titan is the one with the money and the talent to produce tires. What does the crazy union have?”

This brought on Montebourg’s hysterical reaction. He told Taylor, “Your comments, which are as extremist as they are insulting, display a perfect ignorance of our country, France.” The furious Frenchie added the dig, “Can I remind you that Titan . . . is 20 times smaller than Michelin . . . and 35 times less profitable? That shows how much Titan could have learned and gained from establishing itself in France.”

However, the moronic Montebourg did not answer the obvious question of why, if the French tire maker Michelin is so marvelously profitable and skillful, it didn’t pick up the plant itself.

The exaggerated response showed that the Socialist government is once again on the defensive. It is making only the feeblest attempts at reforming France’s notoriously rigid and archaic workplace rules, rules that make laying off or cutting back the hours of workers extremely difficult, and so international business is continuing to avoid opening production facilities there.

I wish that I could revere CEO Taylor as an entrepreneurial hero speaking truth to politicians as stupid as they are powerful. But in his letter, Taylor accused the American government of being little better than the French because it hasn’t taken steps to protect America’s tire makers from Chinese competition.

It doesn’t seem to occur to Taylor that protectionist laws help domestic unions get similarly rigid and inefficient work rules for American workers.




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Comments

Johnimo

The western democracies are universally in a malaise, caused by socialist policies of redistribution, over-regulation and central control. It's as if your car is wobbling and shaking from badly misaligned tires, and you decide to fix the problem by letting the air out of one of them. When that doesn't work, try letting the air out of another, right? It's collective insanity.

Great story! Thanks for the update. At least CEO Taylor is looking out for his company's best interests.

A. Nonymous

Taylor's "crazy union" is called the CGT. As a Frenchman, I had the dubious pleasure of working with CGT members in the French branch of a large American company in the 90s.

Union reps were selected by an employee election, in which only a fraction of the employees voted (the rest thought that the uniformly Marxist trade unions didn't represent them). The main unions were facades for the French Socialist, Communist and Trotskyite parties. Independent unions were outlawed. Only 8% of the personnel was unionized.

The communist CGT had about 20% of the votes. Due to French law, a certain percentage of the company's income had to be given to the unions. Thanks to that bounty, the handful of communists was able to generate an enormous amount of agitation and propaganda.

I had to work with an employee that was one of the CGT union representatives. As such, he was impossible to fire. He was also close to retirement. He managed to get a fake medical certificate saying he couldn't travel, which spared him our dreaded, exhausting trips to various remote customers (wake up at 4 AM, flight at 6 AM, return on the 9 PM flight). Last I saw him, he had retired and was travelling all over the world.

The Wally character in Dilbert was an instant hit in France because there are so many of them in the workplace, courtesy on unfireable unionized employees.

That explains why exempt Frenchman work a lot: They have to pick the slack for these salary guys. Of course, the State now employs inspectors who check company parking lots for cars staying too long, which indicates a breach of the 35 hr/week law.

Laugh while you can, Americans, this is your future.

Gary Jason

Thanks for reading my piece.....

Whether we wind up like France is still an open question, I think. Yes, we have a devout neo-socialist as president, and he certainly has empowered the unions that have funded him so lavishly and slavishly.

But we also still have a powerful federalist structure, and at the state level unions seem to be being beaten back. Michigan just passed a right-to-work law, and Indiana passed one just a couple of years ago. Union membership in the private sector just took an enormous hit last year, and is down to about 6% of our workforce--although union membership is growing, alas, among public workers.

There is still time to save this country from Euro-sclerosis....I hope.

Jon Harrison

This is a fascinating case that represents, in miniature, the coming state of Western political economy. The French have turned, in desperation, to Socialism as the way out of their economic dilemma. Socialism will of course fail, leaving the field eventually to the last, as yet untried, alternative: The National Front. "Fascism with a Human Face" is coming to Europe. It may be ten or twenty years away, but it's coming.

Libertarians make the mistake of thinking that globalization and free trade (read: the rise of Asia) can solve the problems of Western economies. They can't, because too many people in the West(particularly the lesser educated and lesser skilled) lose out. Libertarianism as well as liberalism will be washed away by the tides of the future. The 2030s may see something like a repeat of the 1930s, in Europe and perhaps America as well.

Gary Jason

Libertarianism will be washed away? By Free trade? Then why do you write for a libertarian journal?

No classical liberal I have ever heard of has ever said the free trade "can solve the problems of Western economies." But free trade surely increases wealth, rather than reduces it. Most economists since Adam Smith have believed this, and the literature on this point is compelling. Readers may wish to look at my survey piece in Liberty on this score, "The Case for Free Trade" December 2010, pp. 33-41.

Jon Harrison

Pure free trade between low-wage economies and the more developed countries hurts lower-skilled people in the developed countries. We aren't all equipped to be knowledge workers, and those of us who aren't lose their livelihoods, or at least suffer a reduction in their standard of living, as a result of free trade. Cheaper goods made abroad are of little use to people who have lost their jobs or suffered a reduction in wages and purchasing power. I actually live among such people; I've seen what's happened to them as a result of the changes of the past 25 or so years.

I strongly favor free trade between comparable economies. I also favor a tariff regime between developed economies and economies where wages are very low and the regulatory environment is much more lax. In my view a level playing field for American companies and workers is more important than ideological purity.

I did not say or mean to imply that free trade all by itself will wash away libertarianism. When I post comments I try to be as brief as possible. I leave some things to be inferred by the reader. If I'm too opaque for you, I'm sorry.

Why do I write for a libertarian journal? I've already had this discussion with various readers in the comments section of some of my pieces. I don't propose to explain myself yet again for your benefit. I will just say that libertarianism in my terms is not in lock step with your views (and those of many others, I admit). That doesn't stop me from advocating things that I believe are freedom-enhancing and beneficial for us all. You're free to start a campaign to have me thrown off the masthead, if you like.

"Most economists since Adam Smith . . ." I'm surprised to see a self-proclaimed philosopher indulging in an appeal to authority to buttress his argument.

Geezer

Perhaps the words libertarian & statist, like old & young, rich & poor, and tall & short, are relative terms. A guy who is less totalitarian than his socialist neighbors might be considered libertarian in their company; but in the company of those who believe that government, even in its best state, is but a necessary evil, he might be considered statist.

A guy who regards government as a positive good rather than a necessary evil, but still likes to think of himself as libertarian, might be more likely to be perceived as such by the readers of The New Republic than by the readers of Liberty.

Gary Jason

Sorry, but citing Smith is hardly an "appeal to authority"--that label involves citing someone who is not a relevant expert in the subject pertaining to the issue at hand, and the claims you make about free trader certainly fall in the domain of economics, within which Smith is a credible authority.

As to you "staying on the masthead"--why would I care one way or the other? Sounds like an appeal to pity to me....

Jon Harrison

Appeal to pity? Don't be ridiculous. I was just offering you an outlet for your resentment.

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