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France taps Colbert in effort to bring jobs back home

Published on Monday, 17 Jun 2013
Arnaud Montebourg, France's industry minister. (BLOOMBERG)
Chairman and CEO of the Renault-Nissan Alliance Carlos Ghosn (L) and French Minister for Industrial Recovery Arnaud Montebourg visit the Renault automobile factory line which produces the Zoe electric car in Flins, near Paris, May 28, 2013. (REUTERS)

French Industry Minister Arnaud Montebourg, an advocate of fortress Europe against “unfair” trade practices, says he has a new way to bring jobs back home: Colbert 2.0.

Named after Louis XIV’s mercantilist finance minister, Colbert 2.0 is software Montebourg unveiled last week that he said will allow companies to determine whether they’re better off producing in France. In 17th century France, Jean-Baptiste Colbert raised tariffs to keep out imports and encouraged local manufacturing.

Montebourg is betting he can show companies that factoring in superior infrastructure, quality of labour, research and efficiency, they can benefit from manufacturing in France. His efforts are aimed at reversing the trend of joblessness, which has reached a record in France, with no signs of a recovery after the economy slid into recession in the first quarter.

Companies that took jobs overseas are finding that “hidden costs, rising labour and transport costs, quality issues, the need to be close to customers, and consumers’ growing appetite for made-in-France products are” hampering them, he said at a press conference in Paris on June 14. “Several companies are partly or fully coming back.”

Colbert 2.0 is an effort by France, which has lost market share to European and emerging market competitors because of rising production costs, to try and lure investment. The software, which goes live next month, is built on attempts similar to those adopted by Sweden and Barack Obama’s administration to promote so-called “re-shoring” of production to bring jobs back home, Montebourg said.

Colbert 2.0

The software prompts companies to answer 50 questions before providing a verdict on their potential for relocating to France, giving them an action plan proposal, available aid and a government contact. It also offers to put them in touch with similar businesses that have moved production back to France.

Meccano, a French toymaker based in Calais, northern France, which has outsourced 68 per cent of its production to China, plans to trim that number to 55 per cent in 2015.
“The issue with China isn’t only the rise in wages, which remain 8 to 10 times lower than in France, it’s the lack of skilled labour and production delays,” Meccano chief executive officer Michael Ingberg said at the conference.

Eminence, a French maker of men’s underwear, brought production back from Asia and North Africa when sales dropped last year. It wanted to hold on to better-skilled France-based workers and to react more quickly to swings in demand from retailers, the company’s chairman said.

Other Costs

“We’d rather overpay French workers than pay penalties for missed deliveries,” Eminence chairman Dominique Seau said at the conference.
As transport costs rose, French ski maker Skis Rossignol created 25 jobs at home by repatriating some output from Asia in 2011 and 2013 to be closer to its clients. Labour accounts for about 10 per cent of total ski costs, according to Rossignol.

“A guaranteed ‘made in France’ label is working and creating strong brand value for clients,” said Jean-Laurent Nectoux, a Rossignol director in charge of manufacturing.

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