Archive for September, 2010

Why, why, why, why, why?

September 5th, 2010 admin No comments

In 2009 in France, 43% of new car sales were of  models manufactured in France, that is a 14% drop on ten years earlier. And of the cars manufactured in France, 64% of components were sourced in France (compared with 67% in 1999).

Just one extract from an interesting study that came out this week from the Ministry of Industry. Globally, the percentage of French components in French products has dropped by 75% to 69%. Only a 6%  drop, you may be saying, but when multiplied by trillions of components sourced over the period, it’s pretty easy to understand why French industry is seen to be in decline.

Some industries come out better than others. 86% of components in high tech products are French, as are 80% of luxury goods. However, trains (including the TGV include only 62%, and the airlines just over half).

All of a sudden it is easy to understand why Airbus, for example, has faced consecutive delays to some of its major programmes. There most be a million or so components (if not more) on an A380. It would be a major job getting them delivered, tested and passed even with suppliers housed next door. If almost half of the parts have to be passed through customs and any questions raised during testing fed through a translator, it could become a little more difficult. Unless there are masses of stock both at final assembly and on the high seas or in distribution centres around the world.

It does make you want to ask ‘why’ at least five times!

In any case, the French government has decided to react and is thinking about introducing a ‘made in France’ label. How they are going to define ‘made in France’ based on some of the figures above is another story entirely.

Categories: It's Happening in France Tags:

Money to invest, anyone?

September 4th, 2010 admin No comments

4 septembre 2000 : the CAC40, the French equivalent of the Dow Jones or FTSE index, reached 6922 points.

4 septembre 2010: it closes at around 3672, barely over half of the level of 10 years earlier.

Source : Les Echos, 3/9/10

Source : Les Echos, 3/9/10

Now, Lean Thinkers generally agree that the Lean journey is far more difficult in those companies permanently fighting off shareholders pressures. Don’t you think that, with hindsight, shareholders 10 years ago may have been pushing longer-term Lean improvements rather than demanding short-term financial gain?

For the decline in value of French shares is far more acute than that of either the U.S. or Germany, as indicated by the diagram on the right. The U.S. and Germany are two countries where Lean Thinking has caught on far more than in France (I also read this week that unemployment has dropped in Germany for the 13th successive month).

OK, there have been three waves of crisis in the last years – the Internet bubble bursting, the subprime phase, and more recently international debt. However, contrary to the Dow Jones and Dax 30, the peak in 2000 has never again been reached since.And what is also worrying is that, back in 2000 (as is the case today), technology and innovation were seen as the way forward. 10 years later, technology stock accounts for only 6% of the CAC 40, against 40% at the time.

There have been successes, notably in industry : Air Liquide has increased by 87% and Michelin by 78%. However in the 10 leading stocks in terms of value at this moment, (Total, BNP Paribas, Sanofi-Aventis, EDF, GDF Suez, L’Oréal, LVMH, France Telecom, AccelorMittal, Société Générale), there is only one we could consider as belonging to industry.

Anyone with money to invest? I can only suggest putting it where Lean Thinking is rife, and sitting back with confidence that this is the best investment you can make for the next ten years.

Categories: It's Happening in France Tags:
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