THE WORD: G.M. Gets the Word from France's New President Francois Hollande
Friday, May 11th, 2012
If timing is everything, then General Motors this week picked the wrong time to announce it would sell, or possibly shutter, a transmission plant at Strasbourg, France, that employs some 3,000 people. The announcement coincided with the election of Francois Hollande as president of France, who ousted the incumbent Nicolas Sarcozy.
Prior to his election, President Hollande, and just before the G.M. announcement, he stated that any plans French manufacturers have in cutting employment during Europe's economic difficulties would be met with a challenge. Mr. Hollande made it clear that he would combat "market driven layoffs" and make it financially painful for companies to cut their workforce. He stated that he would "arm wrestle" big employers like G.M. and force them to take a more "moral" approach.
Mr. Hollande doesn't really take office until May 15, but in an interview earlier this week by Michel Sapin, a Hollande advisor and anticipated to be named prime minister or finance minister, Sapin singled out G.M., its partner PSA Peugeot Citroen and other companies, warning them that France would make it "extremely expensive" for companies to cut employment.
Neither Hollande, nor Sapin, stated specifically how they would make cutting employment difficult, but the situation certainly stifles some of G.M.'s plans for reorganization of its unprofitable European operations.
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