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.