France's Auto Industry Flees France

Too much government. Too many regulations. Too many taxes. Too much paid vacation.

Peugeot’s CEO Phillipe Varin highlighted this issue, telling the FT

In 10 years the hourly cost of a worker has risen 31 per cent in France, compared with just19 per cent in Germany, even though a French worker takes home less pay. Workers at Peugeot’s Slovakia plant cost €10 an hour, compared with €35 in France.

The crux of the argument, explored in the FT article, is that French industry has profited from globalization while the worker has seen their jobs disappear. Peugeot isn’t alone in exporting jobs to low cost countries. Renault came under fire at home for setting up a Dacia plant in Morocoo, where workers are paid roughly 1/7th that of a French employee. TTAC’s initial estimation, that profitable, affordable vehicles couldn’t be made in factories that pay 1,800 euro a month and provide 5 weeks vacation, seems to be the kind of sentiment shared by many observers at Peugeot and outside the auto industry.