French economy two

France’s Economy



stark valley contrast
local dominate component
rival end up transmission
debt income competitive
GDP high point outsource
hardly afford up to date
R&D reform acknowledge
hire promise encourage
flexible reluctant drop off (2)
lay off record high





They sometimes call it “Little Germany”. But the Auoux Valley is in France, on the border of Switzerland.

And like Germany, the economy is strong and focused on exports.

The business climate here stands in stark contrast to the rest of France though.

Small and mid-sized companies dominate the local economy; while elsewhere in France, large corporations are the usual employers.

This factory produces components for automotive transmissions. And it’s no surprise that some of their products end up in Volkswagen cars.

Working hours are similar in Germany too.

Lionel Baud, Baud Industries: “We work more than 40 hours a week — not the 35 hours which are the norm in France. We’re here for 40 hours every week.”

These extra hours cost the company plenty though. And the higher costs, including extra taxes, make companies here less competitive than rivals in other countries.

But France needs all the tax income it can get. Debt has now reached a high point of over 93% of total GDP.

To save costs, many industrial companies in the Auoux Valley outsource their research and development projects to the same group of engineers.

The owner of a tool company spends about 50,000 euros at the technology center to keep his products up to date.

Lionel Baud, Baud Industries: “Very small companies can hardly afford their own R&D. That’s why we are all in this together.

We’re competitors; but we all have the same R&D problem.”

French president Francois Hollande has promised reforms to save business owners 30 billion euros.

That should be enough to encourage employers to start hiring again.

But the reforms are slow in coming.

Lionel Baud, Baud Industries: “We’re still too inflexible here in France. Business owners are reluctant to hire new people because they cannot be laid off when business drops off.

We need more flexibility.”

This is the reason unemployment has reached record highs in France.

The government has acknowledged the problem. Now it only has to solve it.

*     *     *     *     *     *     *


1. “Little Germany” is Austria. Is this correct or wrong? Describe Little Germany.

2. Is it more similar to Germany or the rest of France? Compare the businesses in France with the businesses in Germany.

3. Lionel Baud’s company assembles automobiles. Yes or no?

4. What does he say about the work hours or workweek?

5. Do Baud and other small company owners have their own R&D departments? Why don’t they have their own R&D? What do they do?

6. What do they say about labor laws?

A. What could or should France do to boost its economy?

B. Do you think there is a conflict of interests in France?

C. Is your country’s economy similar to France’s?

D. What might happen in the future?


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