French laws force failing tire factory to stay open; lack of competitiveness, investment oddly not improving

posted at 7:01 pm on July 5, 2013 by Erika Johnsen

For years now, the tire giant Goodyear has been trying to stop the financial bleeding from one of its ailing factories in France, continually attempting to negotiate new terms with the unionized workers and getting continually rebuffed until, finally, the plant’s closure became the most economical option. The French workers, however, apparently feel entitled to the 1,173 jobs that the U.S. company provides at the factory, and the battle is currently tied up in court as the country’s largest trade union sues for imagined injustices; in June, a French court finally ruled in Goodyear’s favor, but the Confederation Generale du Travail has every intention of appealing the ruling, via the BBC:

Employees have also filed a complaint in the state court in Akron, Ohio where Goodyear is based. Seeking $4m in damages and class-action status for their case, they claim the company has violated laws on both sides of the Atlantic. …

“Goodyear is the biggest tyre maker in the world,” he says. “It makes $1.5bn profit a year, employs 80,000 people globally and there is only one village which is holding out against them – it is the village of Amiens.”

From the company’s point of view the struggle looks very different. The factory is losing $80m a year, it says, and producing goods there is no market for.

Goodyear’s attempt to save the plant and its profitability began way back in 2007, with plans for restructuring that would have included some layoffs and putting the unionized workers’ 35-hour work week on a more effective rotating six- and four-day cycle that would include nights and weekends. They didn’t like that at all:

Unions refused. The next year they went to court to prevent the company laying off 400 staff, and won. Last year they helped scuttle Goodyear’s plan to sell the factory to Titan, an agricultural tyre producer, in a deal that would have seen many more job losses (including voluntary redundancies).

It was in January that Goodyear finally announced its decision to close the factory, describing this as “the only possible option after five years of fruitless discussion”.

“French law says if you want to put all these workers on the dole, you have to have a good reason,” says Fiodor Rilov, the CGT union’s lawyer. “This may be an American company, with a headquarters in the US but they are operating on French soil and they have to respect our social rules.”

Oh, Goodyear has gained a newfound respect for France’s social rules, I’m sure — now perhaps France could return the favor and try to learn some respect for Goodyear’s right to not do business there?

This is just one of a string of examples of the ways in which France’s egregiously restrictive labor laws are directly hindering their labor markets and economic growth. Voices are coming in from all sides recommending that France do some serious work on creating labor flexibility as one of the prime problems dragging down their economy, because the meager reforms French President Hollande has introduced so far aren’t cutting it.

How it is that the French people at once demanded a path for economic growth and employment, and believed electing a regime comprised of Socialists-with-a-capital-S was going to accomplish that, is still unclear.


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35 hour workweek!!! Goodyear should be ashamed!

KCB on July 5, 2013 at 7:05 PM

It hurts! The stupide hurts. Goodyear ought to just walk away. But even then they’ll still get hounded.

AH_C on July 5, 2013 at 7:06 PM

This is worse than Obama trying to keep Boeing from moving a plant to a right-to-work state.

Somewhere, there is an American union boss crying in his Dom Perignon that he doesn’t have the kind of clout enjoyed by French unions.

Liam on July 5, 2013 at 7:08 PM

Goodyear just needs to turn out the lights and walk away. Who gives a crap what these cheese eating surrender monkeys think/ do / say?

BallisticBob on July 5, 2013 at 7:11 PM

French laws force failing tire factory to stay open; lack of competitiveness, investment oddly not improving
=================================================

Doesn’t make sense….(sarc).

Where are the French gonna get tires,after the
JihadyYouth,have there annually Torch the Cars
Day of Ragey sumpins!!

canopfor on July 5, 2013 at 7:12 PM

How can I miss you, honey, if you won’t go away?

katy the mean old lady on July 5, 2013 at 7:24 PM

There are risks doing business in third world s**tholes, whether France or America (Boeing).

MNHawk on July 5, 2013 at 7:28 PM

On a positive note, I just bought a french rifle. It was never fired and only dropped once.

WIN!

jukin3 on July 5, 2013 at 7:36 PM

“How it is that the FrenchAmerican people at once demanded a path for economic growth and employment, and believed electing a regime comprised of socialists- with a small “s” – was going to accomplish that, is still unclear.

Fixed.

aquaviva on July 5, 2013 at 7:40 PM

“Always blame the Americans. Even if you’re wrong, you’re right.”

- The Movie “Z”

TimBuk3 on July 5, 2013 at 7:52 PM

ProTip for Goodyear:

In Brooklyn, problems like this were often solved with what we called “Jewish lightning.”

Rixon on July 5, 2013 at 8:01 PM

Dr. Z – Michelin has a strict policy in the US that where ever it can to not unionize. I used to work for them in the 90′s and when they bought out Uniroyal/Goodrich, they played some serious hardball with the unions. Michelin gets a pass somewhat in its home country because it is one of the best things going in France. Last I knew, the French plants didn’t produced as many as the American plants and they loved to keep them as non-union as possible. That is why most Michelin plants in the US are in South Carolina – a right to work state. Michelin maybe from France but they know a good location when they find it. They were sick of the unions in France and they told hard truths to the unions in the Uniroyal/Goodrich plants. The union bosses refused a contract that would have made the plants work and keep the workers employed. Michelin began removing the machinery and the workers revolted against the bosses forcing them to sign the contract. Workers aren’t stupid.
It sounds like Goodyear just got caught not schmoozing enough.

DrM2B on July 5, 2013 at 8:22 PM

On a positive note, I just bought a french rifle. It was never fired and only dropped once.

jukin3 on July 5, 2013 at 7:36 PM

.
*** SNORT ***

ExpressoBold on July 5, 2013 at 8:42 PM

“French law says if you want to put all these workers on the dole, you have to have a good reason,” says Fiodor Rilov, the CGT union’s lawyer. “This may be an American company, with a headquarters in the US but they are operating on French soil and they have to respect our social rules.”

How is this not slavery? This plant is closing and these idiots will never get a clue. Goodyear should just simply flip them the bird on the way out of town.

NotCoach on July 5, 2013 at 9:14 PM

So let the Frogs go to work there each day. Management won’t be there.

And neither will the paychecks.

GarandFan on July 5, 2013 at 9:14 PM

The Union and workers must think they can get a better deal or that they can do so via government or court action. They may believe that, even if Goodyear get through all the paperwork, up until the time that Goodyear turns out the lights, locks the doors, and drives away (writing off the plant). Then go, ‘wait let’s talk about this’.

Russ808 on July 5, 2013 at 9:28 PM

Is the factory even worth 80 million dollars at this point? Why not give the factory to the workers… it will warm their little communist hearts… until they realize no one will be paying them.

Seriously. Make a gift of the factory to the union and walk. Cut your losses and learn your lessons.

Karmashock on July 5, 2013 at 9:29 PM

If Goodyear walks, they will never have another of their tires used at Lemans.

Another Drew on July 5, 2013 at 9:32 PM

On a positive note, I just bought a french rifle. It was never fired and only dropped once.

WIN!

jukin3 on July 5, 2013 at 7:36 PM

A good time for a review of the military history of France. http://www.albinoblacksheep.com/text/france.html

TulsAmerican on July 5, 2013 at 9:39 PM

You know, I just watched Atlas Shrugged (Part 1) and then I came here. I can’t help but feel that we are now living out part of that book/movie.

BigGator5 on July 5, 2013 at 10:09 PM

The country-club Marxist must be aroused and envious upon hearing of this thuggery………..

FlaMurph on July 5, 2013 at 10:24 PM

It’s time for Goodyear to grow a pair like Dagny Taggart. Remove anything worth keeping from the plant, and just leave.

If the French government wants to keep it open, let them nationalize it. Let them pay their union boys for working three hours a day, with an hour for lunch and three more to commiserate over how nobody understands the superiority of France.

Goodyear just won’t be footing the bill anymore. Hollande & Co. will be.

They’re losing money every day there, anyway. It’s time to stop throwing it down a rathole.

BTW, anyone who thinks this is anything new should read Victory Through Air Power, by Major Alexander P. de Seversky. Published in 1942, it describes in considerable detail his tribulations with the French government regarding the sale of the Curtiss Hawk 75 (P-36) fighter. Including troubles with their labor unions.

In spite of that, the Hawk was the mount of every ace the French Air Force had in the Battle of France in 1940. A total of 75 were in service.

Final score; French Hawks- 850 Luftwaffe planes downed.

Luftwaffe- Zero French Hawks. Two were lost in landing accidents (one blown tire, one noseover).

Even Bf-109 pilots feared “die Falken“. Only the Spitfire and, later, the Mustang were considered by them to be more dangerous opponents in a dogfight.

And no, they were not impressed with any of the Armee d’L'Air‘s French-designed-and-built fighters. In fact, after France’s surrender, the Germans let Vichy keep all those.

They just confiscated all the Hawks that hadn’t escaped to England, and sent them to the Finns to use against the Russians.

cheers

eon

eon on July 5, 2013 at 10:27 PM

I guess filing in state court was the only path open, now that the Supreme Court recently closed the federal path for foreign employees to file suit against a foreign subsidiary.

unclesmrgol on July 5, 2013 at 10:54 PM

Be a damned shame if it were to catch fire, and Goodyear elected not to rebuild….

cthulhu on July 6, 2013 at 12:47 AM

cthulhu on July 6, 2013 at 12:47 AM

Yes, yes it would.

BigGator5 on July 6, 2013 at 6:58 AM

I suspect that soon, in the end, freedom’s conquerors here and elsewhere will be the most dastardly of all dictators–the many robed government lawyers in the courts, who have continually created their own laws and flagrantly perverted justice and the common good, in the name of the common good.

Why waste all that ammo stored when one well placed or well-paid off lawyer friend can make a ruling to give all you wish for–since their is no longer valid opposition with flames in their bellies for freedom?

Don L on July 6, 2013 at 8:27 AM

To think that it was this nation that loved freedom enough to gift us with the Statue of Liberty, which has in our own land become a farcical symbol. They need to move it to Nogales AZ or somewhere on our broken border, that all the new illegal immigrants might see her and shed a tear for this land.

Don L on July 6, 2013 at 8:32 AM

Neo-bolshevik wanna-bees. Go figure.

locomotivebreath1901 on July 6, 2013 at 9:34 AM

On a positive note, I just bought a french rifle. It was never fired and only dropped once.

WIN!

jukin3 on July 5, 2013 at 7:36 PM

On the other hand, it has been owned by at least 14 different members of La Resistance!

GarandFan on July 5, 2013 at 9:14 PM

Exactly. Removing every last centime from the bank, first.*

* I can already see the new emails in my spam filter:

Msr, as you know, we are having difficulty with the government of France in removing our funds from their banks. With your help, I can transfer out 10million Euros, removing it from the despotic hand of the French Socialist government. For your help, I am instructed to let you keep 1million Euros. All I need is a bank account number….

GWB on July 6, 2013 at 9:56 AM

How it is that the French people at once demanded a path for economic growth and employment, and believed electing a regime comprised of Socialists-with-a-capital-S was going to accomplish that, is still unclear

when your media has been lying to you for a generation, has been totally taken over by those same socilaists, it no woder your population is stupid.

unseen on July 6, 2013 at 10:21 AM

when your media has been lying to you for a generation, has been totally taken over by those same socilaists, it no woder your population is stupid.

unseen on July 6, 2013 at 10:21 AM

I’m confused. Are you talking about France? Or America?

HiJack on July 6, 2013 at 10:43 AM

“French law says if you want to put all these workers on the dole, you have to have a good reason,” says Fiodor Rilov

Well THIS explains a lot.

OccamsRazor on July 6, 2013 at 10:59 AM

I suspect that soon, in the end, freedom’s conquerors here and elsewhere will be the most dastardly of all dictators–the many robed government lawyers in the courts, who have continually created their own laws and flagrantly perverted justice and the common good, in the name of the common good.

Why waste all that ammo stored when one well placed or well-paid off lawyer friend can make a ruling to give all you wish for–since their is no longer valid opposition with flames in their bellies for freedom?

Don L on July 6, 2013 at 8:27 AM

Oddly enough, almost exactly these words were used to describe the French States-General, the “upper house” of the French legislature, under Louis XVI.

The result, of course, was the French Revolution.

clear ether

eon

eon on July 6, 2013 at 2:02 PM

They should just give that plant to the workers, kind of like Jean Valjean, with entirely different motives, of course.

supernal on July 6, 2013 at 2:08 PM

This isn’t about the plant per se; this is about fettering a US company operating in France. Much like they tried with Google.
As others have pointed out Michelin has no such issues. My opinion is that the French are being nationalist and trying to penalize the big rich US company that competes with the France based company.
The French are picking a winner based not on facts but on political belief and what an optimal outcome should be e.g. US company is levied a backdoor tax (forcing Goodyear to keep the plant running as inefficiently as possible) so that Michelin has a competitive advantage.
What Goodyear should really do is name the tires some nationalistic nonsense name (Allah’s Sandals!) , make the tires as cheap as possible (20,000 mile warranty) and sell them all over France at cost, flooding the market and creating an incentive for Michelin to buy them out. Then the French can shut it down the French way.

notalemon on July 6, 2013 at 3:41 PM

You know, I just watched Atlas Shrugged (Part 1) and then I came here. I can’t help but feel that we are now living out part of that book/movie.

BigGator5 on July 5, 2013 at 10:09 PM

Buy Atlas Shrugged II.

hamradio on July 7, 2013 at 11:21 PM

The French CGT has long been known as the last Communist labor union to survive the toppling of Communist dictatorships in Eastern Europe in 1989. Their control of the Renault car manufacturing plants during the 1980′s and early 1990′s led to the total collapse of Renault (due to poor reliability of the cars) until Renault was bought out, at a time when privately-held Peugeot was thriving.

The CGT is extremeley powerful in France, where the constitution allows government employees to unionize. If the government tries to enact laws penalizing unions in any way, the CGT employees go on strike and shut down the government, as well as all buses and trains into and out of Paris, and the government is forced to capitulate.

Goodyear needs to sell that tire plant to Michelin for whatever they can get, and make tires here in the USA.

Steve Z on July 8, 2013 at 9:53 AM