Skip to comments.French laws force failing tire factory to stay open
Posted on 07/06/2013 5:25:12 AM PDT by SeekAndFind
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.
Socialism at it’s best.
It’s wrong to be French.
From the article: Fiodor Rilov, the CGT unions 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.
That’s all you need on this one...when ‘social rules’ trump economic reality, the inmates are truly in charge of the asylum.
I’m wondering... if the factory does not have the money to pay its workers or debts, what does the French government expect them to do next?
Isn’t there a name for the situation where the government controls private industry?
I have some sympathy for Goodyear, but not a lot.
France can hardly be called a bastion of free enterprise capitalism. Union rules and government regulations have been in place for many many years. The communists have controlled the unions for years. The executives at Goodyear, I am sure, were appraised of the union and government environment before investing in that plant.
The government expects the company to pay the workers. Get the money from anywhere but pay the workers. They prefer a government loan which will default and then the government owns the property.
Who would buy Good Year tires in France, home of Michelin ?
Why complicate things? If they’re going to FORCE the factory to stay open, they might as well nationalize it and be done with it.
Are we really that far behind under Obama?
Yes, its called "Obama's Secret Economic Plan"...
This was predicted...in Atlas Shrugged.
They expect Goodyear to pay French workers from the profits made by workers in other countries, chiefly ours. Goodyear should just close the doors, walk away, say goodbye, and let the ridiculous French try to sue them in international court.
This French union is going to find that the US court in Akron does not follow French law, and that US law is clear that businesses cannot be forced to continue business in a place where they lose money.
Now granted, Obama’s illegal NLRB forced Boeing to do just that, to keep a plant open in the blue state they wanted to close, but the courts are far less willing to violate the law.
The solution is really quite elementary, my dear Watson .... simply pass another law requiring all French citizens to purchase these tires.
Soon to be followed by someone advocating that they should impose huge tariffs on imports from Asia.
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