France: More favourable as a Location
Which experiences do the German investors gain from the French employees and their trade unions?
All German companies, which are relevant for us, praise the commitment of the employees in France. They are more willing than those in Germany. German companies also do not have any problems with the workforces in France, since there is respect and discussions from the end of the company manager. Continental was an exception here. Also the experiences of American or Korean companies in France are negative, since their responsibilities appear to be very different and very much self-contained than the Germans. The number of strikes has significantly decreased, in particular in the private sector; in the previous year, France had suffered less that Germany with respect to strikes in railways and aviation sectors. The situation in France had calmed down as compared to the previous years. Also the 35-hours week prescribed by law is not an obstacle in practice. Even if 35 hours are defined in the employment contracts as the working time, the employees work for 38.5 hours on an average per week; the managers work for 44 hours. Practically, all companies indulge into overtime; they must pay just an allowance of 25% to the employees for the same. However, I would like to suggest the following to the German companies, who want to locate in France: They need supporters, such as lawyers or tax consultants, who speak both the languages and know both the systems. This simplifies everything.
What are the general labor costs in France?
The government in Paris has done something for reduction in labor costs. With tax credits, we have lowered the labor costs by 6 % and thus below the German level. This tax credit is converted into tax reduction from 2017. Up to 2020, the rate of corporate income tax should be additionally lowered in a step-wise manner from 33 to 28 %. Lastly, there are also hundreds of measures for simplifying the administrative provisions in force; further implications at regular intervals of six months.
However, the economy demands further reforms by the policies.
We are aware that more reforms are necessary in France. Some have already been initiated. Now, we must wait until the effects of the reforms become apparent; this was the agenda in Germany in 2010. We have poorly declared certain reforms such as pension reform, since we have a joint responsibility, if this is perceived as reform deadlock in foreign country.
How can the German companies support the planned projects such as "Industrie du Futur" (the future industry)?
The platforms Industry 4.0 in Germany and Industrie du Futur in France are compatible. The participating companies can be a part of the projects and also receive government support for the same. This is also applicable for German subsidiary in France – the subsidiary is considered as French company as all others. With the platform Industrie du Futur, we want to explicitly bring in foreign Know-how and foreign technology.