President Jacques Chirac and Prime Minister Dominique de Villepin have led efforts to force HP to rethink plans to cut 1,240 jobs in France -- a sensitive issue as the government is seeking to reduce unemployment running at close to 10 percent.
Labour Relations Minister Gerard Larcher said the head of HP's European operations, Francesco Serafini, had explained the company's position during talks on Monday afternoon.
"(Serafini) confirmed that the number of 1,240 job cuts put forward so far was not definitive and could thus be revised downwards," Larcher's ministry said in a statement after the talks.
"The minister took note of these commitments and of the assurances given as to the lasting presence of Hewlett-Packard in France," the ministry said, adding Larcher hoped for a constructive dialogue between HP management and workers.
If the job reductions are confirmed to be significantly less than announced, the news would spell a victory for the government of Villepin, who has defended a policy he calls "economic patriotism" in vowing to take a tough line against any company moves that are not in France's interest.
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CODE OF CONDUCT
Villepin said the "code of good conduct" for companies should focus on respect for the law, clarification of rules for firms receiving public aid, and better information for the authorities on companies planning major restructuring.
"We hope that everyone is assessing what each job represents, and what consequences it can imply in terms of personal drama, what difficulties for family life," Villepin said on a visit to the central city of Tours.
"This is not about introducing burdensome systems, which would constitute barriers. What we want is to be able to accompany everyone so that the general interest is being preserved."
Villepin said he was very attached to the presence of HP in France, where the firm accounted for some 5,000 jobs. He said he hoped the company's reorganisation would be negotiated with its workers, and the impact on jobs reduced as much as possible.
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What's the news here?
'We are not protectionists,' France to Wall St
NEW YORK, Sept 26 (Reuters) - France launched a Wall Street charm offensive on Monday to allay fears of protectionism in the wake of a public backlash against U.S. corporations, telling American investors the country was "open for business."
Finance Minister Thierry Breton defended a government campaign for "economic patriotism," which has rattled some foreign investors, and said new controls designed to shield sensitive interests like defence had been over-dramatized.
"There's a difference between patriotism and protectionism," Breton said. "French regulation is absolutely mainstream."
Breton, a former corporate chief who became finance minister earlier this year, offered the reassurances as relations between Paris and corporate America hit more turbulence over plans by U.S. computer maker Hewlett Packard to cut 1,240 French jobs.
The dispute comes weeks after another French outcry over speculation that food firm Danone could fall victim to a hostile takeover bid from U.S. soft drinks firm PepsiCo. PepsiCo declines to comment on whether it plans a bid.
Breton said companies should give warning on restructuring plans and, while playing down the state's role in driving the economy, hinted at a government victory in talks being in held in Paris to persuade Hewlett Packard to soften the blow.
"I am convinced that this message has been heard and that things will go smoothly," Breton said. In Paris, France's labour minister said the number of cuts could be revised downwards.
President Jacques Chirac and Prime Minister Dominique de Villepin have led efforts to force HP to rethink plans to cut the French jobs -- a sensitive issue as the government is seeking to reduce unemployment running at close to 10 percent.
The row highlights differences between France and the United States over economic reforms, with Villepin loosening France's rigid labour rules without giving ground to his probable rival in 2007 presidential elections, free-marketer Nicolas Sarkozy.
Jostling between the two in the race to succeed President Jacques Chirac, if as expected the 72-year-old decides not to run again, has made France harder to read and may explain some confusion over where it stands on takeovers, investors say.
APPEARANCES
The summer-long campaign to protect Danone went all the way from farmyards to the presidential palace, with Chirac saying the rumours proved the need to be wary of speculative investors.
Days later, Villepin launched the "economic patriotism" slogan in a major policy speech and the government rushed forward an announcement about existing plans to prepare a list of sensitive sectors to be protected in the national interest.
France believes it is simply defending its interests by drawing up a list of strategic sectors like defence and national security in which the state will have a veto on foreign control.
Data compiled for Reuters by financial data firm Dealogic shows that so far this year French companies have been twice as acquisitive in Europe as foreign companies have been in France.
French firms have bought European ones worth $60 billion, compared with $29 billion spent in France by foreign companies.
In New York, French business leaders painted France as more market-friendly than politicians like to admit.
"There is a public impression that France is becoming more protectionist. But the financial community knows the reality and there is a gap with appearances," said Gerard Mestrallet, chairman of utility Suez (LYOE.PA: Quote, Profile, Research) and president of Europlace, a French financial industry lobby which hosted the event.
France has relaxed its 35-hour work week and redrawn bankruptcy laws in an effort to boost the economy. Its firms have shaken off billions in debt through restructuring.
Still, some U.S. participants remained skeptical.
"Private equity funds are attracted to Europe for its inefficiency, which may offer an opportunity to make an above-market return," said Martin Bienenstock, co-head of the restructuring practice at lawyers Weil Gotshal & Manges. (Additional reporting by Caroline Brothers, Paul Carrel)
Financial Times
EUROPE
Gerard Larcher, France's employment minister, said yesterday that US and UK investors were unfairly writing off France as "an Asterix village" for its outspoken state intervention, even though it was the world's third-biggest destination for foreign investment.
After a two-hour meeting with Hewlett-Packard's European head on Monday night, Mr Larcher defended his calls for the US computer group to scale back job cuts in France, saying companies "must respect the territory in which they operate and the people they work with".
France has made tackling the unemployment rate - which has been stubbornly above 9 per cent for the past decade - its priority, and the state sprung into action over HP's plan to cut 1,240 jobs in France, a quarter of its French staff. The US group announced plans to cut 14,500 jobs worldwide in July, with 6,000 jobs affected in Europe.
Mr Larcher told the Financial Times that his meeting with Francesco Serafini, HP's senior vice-president of Europe, Middle East and Africa, had produced "concrete results".
HP promised to make future investments in France and to limit job cuts by negotiating ways to improve productivity with its staff. HP had earlier rebuffed calls to repay regional grants, arguing it had paid Euros 700m (Dollars 839m, Pounds 475m) in taxes in France but received no aid.
"I get the feeling sometimes that our friends across the English Channel and across the Atlantic think that France is somewhat like an Asterix village. That is not the case. But sometimes our way of expressing ourselves reflects our Latin feelings," said Mr Larcher.
In contrast, when IBM, the US computer group, announced a similar number of job cuts in France in July, it hardly raised an eyebrow. That is because IBM had already held lengthy consultations with the government and trades unions.
Mr Larcher said 30,000 jobs were created in France last year by investments from North American companies, in sectors such as cosmetics, autos and health. "If we were not attractive and competitive, we would not have had these results."
Foreign direct investment in France fell sharply last year to Euros 21bn, but it still ranked third among industrial countries over the 2002-2004 period, behind China and the US, according to the French agency for international investment.
The French government is planning to spend Euros 1.5bn over three years to develop 67 "poles of competitiveness" across the country, as well as a further Euros 3bn for high-technology companies from the newly created agency for innovation. These plans are intended to attract more foreign investment.
Mr Larcher said rules would be tightened to make this aid conditional on companies maintaining a certain level of jobs in the area. He also said the European Union should examine EU-wide policies for attracting foreign investment.
Moving forward
The world’s economic, social and environmental problems are so extensive that challenges will undoubtedly remain for the foreseeable future. HP’s objective is to continually increase our positive impact through our global citizenship work, while responding to changing needs and seeking areas where our investment is most effective. We are focused on three challenges for the coming three to five years: addressing electronic waste, raising standards in HP’s global supply chain and increasing access to information technology. These are critical issues facing our industry, and we are committed to making a positive contribution. Although we are pleased with progress to date, much remains to be done.
Please send comments to hp.globalcitizenship@hp.com
Source :
http://www.hp.com/hpinfo/globalcitizenship/gcreport/pdf/gcr_abridged_05.pdf
Bernard Meric was the champion and Mark Hurd management lay him off...
No, electronic industry is not environmental, non equity business and the worth aspect of the globalization.
HP's board is a mafia!
BUSINESS WEEK EDITION OCTOBER 10, 2005
HP's French Twist
Why its plan to lay off 1,200 in France has reverberated all the way up to President Chirac's office
Shock waves have been emanating from Grenoble ever since mid-September, when U.S. tech giant Hewlett-Packard Co. (HPQ ) announced it would eliminate more than 1,200 jobs in France. A big chunk of the cuts is likely to come from this pleasant city of 425,000 in the French Alps, where HP employs 2,400 people, about half its French work force. Angry HP workers poured into the streets when they learned of the plan, and Grenoble's mayor on Sept. 20 led a delegation to HP's Palo Alto headquarters, where he received a polite but noncommittal reception. Advertisement
The protests didn't stop there. HP's European brass were summoned to Paris on Sept. 26 for a meeting with France's Labor Minister. Prime Minister Dominique de Villepin suggested that companies might be required to sign a "code of conduct" limiting their ability to lay off workers if, as in HP's case, the government financed road works and other improvements benefiting their factories. President Jacques Chirac even asked the European Commission to intervene, although his request was quickly rebuffed. HP, for its part, appears undeterred. "We all know how politicians are. For better or for worse, this has provided them a platform to get some air time. But we don't feel it's going to impact our ability to do what we've announced," Todd Bradley, executive vice-president of HP's Personal Systems Group, told an investors' conference in San Francisco on Sept. 22.
Grenoble seems an unlikely site for such an uproar. For more than a decade it has billed itself as France's answer to Silicon Valley -- and with good reason. It is a world-class research center, with scores of public and private labs studying everything from advanced materials to microelectronics. In valleys leading out of the city, cow pastures have given way to office parks and gleaming factories run by multinationals such as Royal Philips Electronics (PHG ) and STMicroelectronics (STM ), as well as successful local companies such as Sofileta, a manufacturer of high-tech industrial textiles, and IT company Groupe Silicomp. At 8.7%, Grenoble's unemployment rate is well below the national average of 10.1%. The tech workforce of 25,500 is set to grow over the next few years as Grenoble and the surrounding Isère region get a major infusion of aid from Paris to encourage nanotechnology research and development. "Can the local economy absorb the shock from HP? Yes," says Jean-Paul Giraud, president of the Agency for Studies and Promotion of Isère.
So why all the protests? Politics, for one thing. Chirac and his government have made fighting unemployment their top domestic priority. News of the HP layoffs plays into national fears that France is losing jobs to lower-cost countries in Eastern Europe and Asia. Companies such as Philips and IBM have already eliminated hundreds of jobs in France in recent months while expanding their payrolls in places such as Poland, China, and India. HP hasn't said whether any of the jobs in Grenoble will be transferred elsewhere. But employees note the company has a fast-growing facility in Slovakia that performs some of the same functions as its site in the Grenoble suburb of Eybens, which handles an array of functions from customer support to software development.
Eric Gaudé, an engineer at the Eybens facility, says that many laid-off workers could probably find other jobs in the area -- though probably not as high-paying as at HP, where employee unions say the average annual salary is about $48,000. The deeper fear, he says, is that HP, which first set up shop in Grenoble in 1971, will eventually shutter most of its operations here: "There's a sense of treason."
Grenoble's authorities have complained bitterly that when HP wanted to expand the Eybens site in 1998, local governments spent more than $2 million to acquire and clear a piece of adjacent property that they then resold to the company for less than $500,000. Patrick Starck, the president of HP France, says HP never promised to create jobs in exchange for the assistance. Moreover, he says that over the past decade HP has paid more than $840 million in French taxes, including about $90 million to the municipality of Eybens. "We've been a good citizen," he says.
Dig a little deeper, and there's still another reason for Grenoble's angst. Despite generous seeding from Paris, the Silicon Alps region has not developed the rich ecosystem of high-tech startups and spin-offs that makes Silicon Valley's labor market so resilient. True, government research sites such as the Laboratory for Electronic and Information Technology (LETI) have served as incubators for some successful startups. One is Soitec, a 13-year-old company with $167 million in annual sales that is a world leader in supplying advanced insulation technology to the semiconductor industry. Yet unlike Silicon Valley, it's relatively rare in Grenoble for people to quit their jobs at one of the big high-tech outfits and take a stab at starting their own businesses. Of 48 recent high-tech startups listed by the local economic development agency, only a dozen were spun off from other companies, while the rest were hatched at government labs. "France does not have a culture of risk and entrepreneurship," says Alain Lefebvre, one of four former HP employees who started VoluBill, a Grenoble-based company that provides customer-billing technology to mobile-phone operators.
Risk aversion may be one part of the problem, but government regulations are another. Even a startup like VoluBill, with 55 employees, has to give two months' paid vacation to its employees because of worker-friendly French labor laws. Strict anti-layoff laws mean that workers at big companies have come to expect that their jobs are guaranteed for life -- unless the company pays them handsomely to leave. That's what happened at HP in 2003, when the company eliminated 1,300 jobs in Grenoble through early-retirement plans and buyouts that topped $250,000 for some workers. Under those conditions, it's hardly surprising that few employees strike out on their own.
The outlook for Grenoble isn't all gloomy. The pace of high-tech business creation has picked up since 1999, when France passed legislation allowing government researchers to take leaves of absence to start innovative businesses, says Jean-Bernard Schmidt, president of venture-capital group Sofinnova Partners in Paris. More recently, France's center-right government has started providing tax breaks to companies trying to commercialize new technologies, while relaxing some regulations on small businesses. For instance, in August, a new type of contract was introduced that allows companies with fewer than 20 workers to fire new hires more easily. Some 30,000 such contracts were signed in August alone.
French startups also are benefiting from greater access to venture capital. Sofinnova has financed recent startups originating from such French giants as defense and electronics group Thales and pharmaceutical maker sanofi-aventis Group (SNY ). "The ingredients are now there," says Schmidt. But the allure of the Silicon Alps may no longer be enough to captivate HP and other multinationals.
Good article, nice writing, fun ideas about french but lots of mistakes or unfair comments.
One example ? "two months paid vacation ... labor laws".
First, French law is 25 days + some bank holidays (probably less than in US).
2nd, Is that a problem people having 25 days of holidays or more if the YEARLY SALARY is less than people having "just" 10 days Off ?
3rd, Is your job so prehistoric that # of days are the right tool to evaluate it ?
So, I had some smiles reading this article as some remark are absolutely true but I really encourage people to step back and make their own judgement about many topics rather than just absorb them.
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