U.S. CEO to France: ‘How Stupid Do You Think We Are?’
blogs.wsj.com
blogs.wsj.com
When you don't have to insult someone it is probably better not to. Because those pesky French just might publish your less than elegant letters, your stockholders might read those letters and could very well think: "This guy runs the company I invest in? I'd better move my money out before his loud mouth causes him to lose business.".
Stockholders are fickle, and some stockholders actually care about more than just the numbers (of course, that is a minority).
Also, if you communicate you negative interest when a foreign representative has thought to offer you a chance at some deal you may want to think of the future. Effectively you are saying 'if you are so kind as to think of me I will repay you with trash'. That will likely not be repeated again and likely the effect will be much further spread than just this one country and just this one official.
That bulk deal for Tires for all the vehicles of the French armed forces (Michelin?), the police force or their connections with the ministry of labour and their counterparts in other countries. Piss off politicians in enough places and it will backfire.
Maybe there is some hidden upside but I don't see any.
Finally, you are also representing your country when you do business abroad. Every other American CEO lost a little bit of respect today by re-inforcing certain stereo types that we could all do without.
If you are ever in a position like this, please say 'no' with some grace.
Saying nice, comforting things to them (while they fail and people lose their jobs) would be a greater injustice than being honest and frank. I bet no one else has ever spoken that directly about the matter. Sometimes, that's precisely what is needed.
Another thing that bugs me is the hypocritical stance of suing Chinese tire manufacturers and then turning around and manufacturing in China.
If you do something like this - it's a pretty drastic departure from good form - there ought to be a reason for it, some kind of upside to balance the obvious downsides.
Workers in France work for three hours, eat for two and talk for another three? Really?
Producing in France is only expensive because of the labour costs? Or is there maybe also that pesky environmental controls issue?
Europe has very low restrictions on imports, because it tries to implement free market as purely as possible. Many voices in France say we must be more aggressive on importation taxes, and that even US has a more protected market than us. After all, no west country can beat China in production costs.
Problem is, those voices are mostly from nationalist and xenophobic parties. Even current left wing french government would not touch total free market.
Now, there is the insult. Saying french workers work 3 hours a day is totally stupid. Normal work day is 8 hours for private sector, and 7 hours for public sector (but most public sector workers work 8 hours and then take a day off to compensate over worked days). The reason because average hours per day is low (see other comments) is because unemployment is high, so many people accept part time jobs and short term jobs.
Now, combine the cynical stance "we can produce cheap products in China and sell them to you with no penalties" and the insult, and you've got perfect food for nationalist parties. Once again.
He didn't say workers came to the factory for 3 hours then left. What he said was that out of the 7 hours of a work day, 1 is lost in breaks and lunch, 3 are spent chatting instead of working and there's only 3 ours of actual work being done.
If you read the comments on the article the vast majority actually support what that CEO says and disapprove the actions of the CGT.
I could see why you'd viscerally feel that way, but if the tariffs that are being applied in the US aren't also being applied in other countries (Europe, for example) then he is unable to compete with Chinese tires without creating a factory there to get the same subsidies.
Hello dear French Person,
We have taken your offer under consideration and have decided we are not interested.
Experience has taught us that we can produce cheaper in Asia which is why we are not going to set up a manufacturing base in Europe.
best regards,
x
Je vous prie de bien vouloir agréer, Monsieur, l'expression de mes honnêtes et respectueuses salutations.
When you've been insulted you can insult back by throwing rotten fish or you can insult back by being very explicitly correct and I sense this is some slight variation of that. Maybe someone who is more experienced in French can confirm or deny that.
That's actually what the minister did in his reply.
>Wow, what a total jerk. [...] >When you don't have to insult someone it is probably better not to. //
Also is there any basis for this:
>I'd better move my money out before his loud mouth causes him to lose business. //
He sounds like a no nonsense kinda guy that is getting annoyed that people keep asking him to intervene and save tire plants without letting him address the issues that would allow the plants to be saved?
He's been given an opportunity, if he sees any bread in it he should take it, if not politely refuse. Just so the next time there is an opportunity he's still on the 'call' list.
I can see 0 upside to acting like this, and I'm known as pretty direct myself. I'd never insult a government official - in writing, no less - unless it served a purpose and I can't find any purpose here, just insults for insults sake and direct proof of acting on incorrect information. Keep in mind that France has a huge domestic tire manufacturer that negates pretty much everything mr. Titan says here. If he's not happy with the factory operation, it's equipment or its workforce then it's time to either negotiate or to bow out with some grace.
Shooting yourself in the foot like this is not the way business is done, especially not in France where they value propriety in business as much as anywhere else on the planet. Sure there may be insurmountable downsides but given an opportunity you can simply say 'pass', no need to spit the person giving you the opportunity in the face.
This is how tariffs work. You don't tax imports to fork over free money to domestic companies. The point is to increase the cost of the imported good to compensate for illegal (from the WTO's point of view) Chinese subsidies.
I'm confused as to why he thinks those taxes should go to Titan.
He does appear to be a bit flippant as well.
Probably because from 2000–2005, under U.S. law [0], anti-dumping duties did get disbursed to the U.S. companies that brought successful anti-dumping complaints. This is illegal under WTO rules, however, and Congress repealed the law after the WTO authorized retaliatory sanctions against the U.S.
He could be a stereotypical welfare queen. You know, the type who think they are entitled to "free stuff" at taxpayer expense.
The substance of the letter is this: we'd rather buy an Indian or Chinese tire company to get the government subsidies and take advantage of the low cost of labor.
The stuff about French workers only working three hours a day is fluff, and on top of that almost certainly exaggerated out of context and/or apocryphal.
See: http://www.oecdbetterlifeindex.org/topics/work-life-balance/
The French work on average 1,554 hours per year, about 10% lower than the OECD average of 1,749. Is that 10% breaking the backs of French tire manufacturing? Of course not. Consider that South Koreans work on average 2,193 hours per year, a staggering 25% higher than the OECD average. Why doesn't Titan manufacture tires in South Korea?
The answer is that relatively small differences in the number of hours people worked aren't driving the economics here. The French work somewhat less than say Americans, but also make somewhat less money than say Americans (last I checked, manufacturing jobs paid on an hourly basis). To be accurate, the letter could have said: "we won't manufacture tires in France because the French work 6.5 hours per day on average versus 7.5 per day for Americans." But that would have sounded stupid. Hence the need to exaggerate and say: "the French only work 3 hours per day!"
What's driving the economics is, as the letter points out, $1/hour wages in China or India, where people are happy to get so little money because those countries are poor and have low standards of living relative to western countries. The rest is just handwaving and fluff.
The big public rant about how bad things are in the factory looks just like a large media spin to justify the closure of the factory.
But what are you gonna do, it's become trendy to take swings at the French for being cowardly, lazy, corrupted union-loving socialist epicurian bastards with no engineering and manufacturing skills whatsoever even though rankings, statistics and facts paint another picture.
So it's not fair to accuse him of imagining this based solely on cultural stereotypes. He has expertise beyond that, both in the industry and the specific factory; that's why the French government approached him.
Also, your OECD averages for France don't tell us anything about how a single troubled factory works. Many French businesses are doing fine, but they aren't looking for a foreign-buyer rescue. The Titan CEO is speaking of one, specific troubled factory, with a specific (likely unfireable) workforce. Its work environment might be among the worst France's traditions, unions, and political influences has to offer. As thin as the anecdote in the CEO's letter is, it's still stronger than an argument based on national averages that include healthy businesses.
For example, the last sentence phrase "I told this to the French union workers to their faces" is clearly referring to specific workers at a specific site, not all French workers (or even French union workers) everywhere.
He does emphasize the descriptor 'French', but that seems both to rub a little salt in the wound of the national official he's responding to, and perhaps to contrast those he's describing with non-French workers at the same factory, or with workers in similar tire factories outside France. It isn't evidence the author has the same judgement of all French workers, even though that expansive interpretation is an easier strawman to knock down.
As http://www.ibtimes.com/us-labor-department-statistics-vindic... points out, the per hour productivity of French workers in manufacturing is only 78% of the per hour productivity of US workers. And going to the statistics linked in that chart, I note that French workers receive 144% of what US workers do per hour. (I looked for both India and China in the stats, but failed to find them.)
So yes, he's exaggerating. But he has a point. French workers do less and receive more than US workers. If I were a manufacturer, I wouldn't want to run a French factory either.
In France, the verb 'work' is travailler. Traditionally this meant literally to toil, a chore, an obligation. In Germany, the word werken means to build, create, do. The German word more aligned with travailler is arbeit. This lack of correlation in the word work I believe may explain the differences in the approach and cultural views towards work that I see across Europe, particularly with latin root romance languages.
The second factor I've seen is climate. In the more productive northern European countries, it's generally colder. There's been a historical need for produce and for people to work (not endure or arbeit) to trade in order to get everything you need in terms of food and shelter.
South of the Olive line something strange happens. If you look at Spain you'll see that there's a long siesta during the day. This is because for a large part of the year Spain's too hot to work in during most of the afternoon. While we have air conditioning now, hundreds of years of cultural differences I feel may have led us with ingrained ideas about what work is and what it means, with those differences reinforced by climate.
For example, in Turkey there's no such thing as a siesta (there's no time in Istanbul for one anyway). Culturally it doesn't really exist, yet it's as hot as parts of Spain that do.
I could be completely wrong about this, but it's just something I've noticed. I do believe that the unions are crippling France's productivity, but France is as likely to change in the short term as the rest of Europe to France's view IMHO.
EDIT : I'm not saying that Germans, Brits or whoever are harder working, or that the French, Spanish, Moomins are lazy, far from it. I'm pointing out some differences in how people perceive work (i.e. neutrally or with negative connotations) based on language and culture, based solely on my own experience. For what it's worth I've worked with lazy Brits and Germans and hard working French and Spanish people. The Moomins I've never worked with, sorry if you're a Moomin and my ignorance upset you.
raverbashing makes a good point here: http://news.ycombinator.com/item?id=5252446
"travailler" comes from Latin, in spanish the same word is "trabajar", notice the resemblance. It literally means "to work" in english. Just saying this because I don't really buy it that "travailler" in French means "to toil".
http://en.wikipedia.org/wiki/List_of_countries_by_GDP_%28PPP...
Another fact that contradicts that stereotype is France's position as a recipient of foreign direct investment:
http://en.wikipedia.org/wiki/List_of_countries_by_received_F...
Why would people invest so much in a supposedly "lazy" country?
I'll just say that right now I'm in Spain, it's frigging cold and I have been working for nearly 12 hours straight.
France is a hard working country. It's not where it is today just because there is an Eiffel tower and great bread.
I realize that bashing France is always enjoyable but although its going downhill it's still one of the richest and most powerful countries in the world.
People have more holidays but work for longer hours. One example of one factory doesn't say much about the country as a whole.
For the record, in Germany, 32 hours a week is frequent in many factories (VW).
The question one could ask, is how come the factory reached a point where people work only three hours per day?
It's however true that the minimum wages are far above the minimum wages in India or China. I'm not sure dropping wages to Chinese levels is the solution.
I'm not saying there aren't any problem.
There is a recurrent problem with unions in France and the lack of communication between unions and employers.
Work laws are rigid and the amount of tax companies suffer clearly costs a great deal of opportunities to the country.
There is also a recent, negative shift, toward work and effort in general, especially in the youngest generation. I'm however afraid this might not be specific to France.
I'm not saying that it isn't. Sorry, I was commenting on etymological and cultural differences. Most of the French people I've worked with have a very different view of work compared to most of the British and German people I've worked with. My thoughts on this are that it's cultural, and that the etymology may correlate with this.
http://www2.warwick.ac.uk/newsandevents/pressreleases/south_...
It's just a very basic psychological mechanism of likes and dislikes, prejudice and favoritism, but masquerading as something intellectual.
'Werk' is a noun being either a factory or a creation of an artist. But to work still means 'arbeiten' in German.
'werken' in the sense of 'to work' is dutch. Maybe you mean this?
Other than that: I can tell you that my German colleagues aren't really more motivated or hardworking than my French, English or Polish colleagues. That hard working German stereotype is a nice stereotype but it isn't really all too true.
(And curiously, in the latin languages it's all the same root)
The real origin is this: http://en.wikipedia.org/wiki/Tripalium
"A tripalium is a three-staked instrument of torture."
This makes no sense at all. What is the mechanism at play here? Languages with different etymologies for the verb to work impress those differences into the cultures that use the language? Travailler doesn't really mean toil at all, besogne is the word for really hard chores, lit. Travail pénible. There is no connotation that work is always a chore. French has the same type of words for making things as German goes. This goes back to the agriculture/craftsmen distinction in the middle ages. There is no difference.
>>The second factor I've seen is climate. In the more productive northern European countries, it's generally colder. There's been a historical need for produce and for people to work (not endure or arbeit) to trade in order to get everything you need in terms of food and shelter.
Productivity isn't equivalent to working hard at all. Differences in productivity and wealth in european countries generally go back to pre-industrial developments in technology. Hotter climates tend to not be as integrated into Europe due to simple geography. The alps and the Pyrenees are two examples. You can also look at political developments that helped give rise to reliable systems of law absent elsewhere. As an Arab commented during the crusades, the crusaders could depend on freedom from arbitrary judgments. Again, this development seems to be based on geography but has nothing to do with the climate per se.
Methinks he did them a great service in being brutally honest. Those trying to solve the obvious problems will make much greater progress with such a letter in hand, rather than the usual apologetic tact. "Helpful are the wounds of a friend..." I'm sure he would, in fact, like to buy a French tire factory, but ridiculous pay for minuscule work makes for an offer no less insulting than his reply.
And no, it's not like telling a random fat person he's fat. He was approached with a request that he purchase the company. It's more like an obese slob applying for a serving-staff position at Hooters or Tilted Kilt.
http://www.dailymail.co.uk/news/article-2281645/Maurice-Tayl...
As in Christine Lagarde, now head of IMF, did not have good comments about the work her own people do
It would have been more effective perhaps if he had shared with the people of Amien the context of the discussion. Something along the lines of "this is what we can pay per worked hour if we want to sell tires to your neighbors. More than that, and they will buy them from Chinese factories." And let the unions be the ones who get to decide that the jobs go out of the country.
Journalists should be forced to say "correlation is not causation" ten times before writing each article.
That guy is pretty crazy.
http://www.lesechos.fr/economie-politique/france/actu/020257...
Sir,
Your words, as extreme as they are insulting, pay witness to your complete ignorance of our country, France, and its solid assets, such as its world renowned power of attraction and its ties with the United States of America.
France is proud to host more than 20 000 foreign businesses, representing nearly 2 million jobs, a third of it's industrial exports, 20% of its private R&D and 25% of its industrial jobs. Every year, 700 foreign investors make a decision to localize job and value creating investments in France. And this strong attractivity is not waning, on the contrary, it is strengthening every year.
Amongst these foreign investments, the United States take the first place. 4200 subsidiaries of american businesses represent nearly 500 000 jobs. The presence of american businesses in France is not new: Haviland since 1842, IBM since 1914, Coca-Cola since 1933, General Electric since 1974, and so many others. These ties are renewed every year: in 2012, businesses like Massey-Fergueson, Mars Chocolat, or 3M chose to grow their presence in France.
What were the decisive factors in these decisions? Foreign businesses come to France for its quality infrastructure, its enviable living environment, one of the most competitive energy in Europe and an enviroment favoring research and innovation. But above all, in opposition to your ridiculous and disparaging remarks, the bulk of these businesses know and appreciate the quality and productivity of the french workforce, its engagement, its knowhow, its talents and the competence of french workers.
To strengthen this power of attraction, the french government has just taken 35 measures in the "National pact for growth, competitivity and work". Amongst them, a tax refund for competitivity and work lighten by 6% the salary load of businesses of between 1 and 2,5 SMIC. Social partners have also reached an agreement on job security, which illustrate the quality of the social dialogue in France and its importance to our government.
Might I remind you that Titan, the company you helm, is 20 times smaller than Michelin, our French technology leader with global reach, and 35 times less profitable? This demonstrate how much Titan could stand to learn and gain from implanting in France.
France is even prouder and happy to host american investments that our two countries are linked by an old and passionate friendship. Are you at least aware of what La Fayette did for the United States of America? And as for us, we will never forget the sacrifices young american soldiers made on the beaches of Normandy to free us from nazism in 1944. And since you chose to criticise your own country in the email you sent me, I must tell you how much the french government admires the policies put in place by President Obama. As our minister of industry, I am particularly impressed by his action favoring relocating industrial jobs in the United States and its radical innovation. There is a certain link between our current policy and the one inspired by your President.
You evoque your intention to use certain countries' workforce to flood our markets. I have a duty to inform you that this condamnable short-term thinking will one day face a justified reaction from States. Such is already the case for France and it's growing amount of allies within the European Union who are campaining for reciprocity of trading and are working against dumping. In the meantime, be assured that I will make certain that our competent governmental services will work twice as hard to inspect your imported tires. They will be especially mindful of the respect of the applicable standards in matters social, environmental and technical.
Please accept, sir, my greetings. ((That greeting is essentially untranslatable)).
Arnaud MONTEBOURG
Of course he would. Of course, the French union workers might be a bit too far on the other end of the spectrum.
(* - we may also presume those 3 hours do not constitute "hard" work.)
I don't think this is entirely true. In fact, I think Americans have been caring more and more over the past few decades, especially about items made in Asia (and please don't mention Apple).
Yes, but both can be true at once. :)
It's this deafness to the meaning of your own words that would allow a loudmouthed industrialist-type to shout "class warfare!" the moment new taxes are proposed on the wealthy. This letter is an unprovoked attack on French working people. And if French working people decide to non-violently retaliate against the company by petitioning for import restrictions, organizing a boycott, etc, it would be wholly justified.
Actually, his main gripe is that after visiting the factory, he realized workers only do 3 hours of actual work in a typical 7-hour day. When he brought that up to union reps, they bluntly replied that "it's the French way".
I understand he felt the urge to vent his spleen at someone, but now they are going to be blackballed should they ever need anything from the French government.
As if. Correlation is not causation.