Fascinating account, in LeMonde this morning, of the suicidal adoption of the neoliberal 'no-logo' business model by the French multinational Alcatel...
"In 2001, Serge Tchuruk, then CEO of the French telecoms giant Alcatel (at the time employing 150,000 people in 120 countries worldwide, a third of them in France, and with almost €25 billion in revenue), outlined his intention at a conference in London to turn the group into a "factoryless company"... the idea that companies should focus on what generates the highest margins: research and development, marketing, patent design, services and so on. The physical manufacturing of goods, which yields little profit but requires substantial capital and payroll costs, should be outsourced to low-cost foreign countries, especially China, which was at the time opening up to global trade.
"Despite warnings from labour unions and some economists, who describe it as industrial suicide, a threat to jobs and the abandonment of strategic expertise, financial markets at the time enthusiastically welcomed the announcement, and Tchuruk was named "Manager of the Year" by Le Nouvel Economiste. Other major groups followed Alcatel's lead: Pechiney, Thomson, Rhône-Poulenc, Renault and PSA parted with several factories and moved production abroad. In the "happy" era of globalization of the 2000s, France became less and less a country of producers and increasingly a country of consumers of equipment manufactured in Asia or Eastern Europe.
"This policy accelerated the deindustrialization of France, which had begun in the 1970s. From 2000 to 2020, the share of manufacturing in the country's GDP dropped from 16% to 10%, and France lost over a million industrial jobs. Between 2001 and 2004, Alcatel sold or closed more than one hundred factories worldwide – including in France – and laid off two-thirds of its workforce. By outsourcing manufacturing to third parties, the group lost control over quality, timelines and production costs. Gradually, Chinese subcontractors developed their own expertise, and Asian competitors adopted the opposite strategy by combining research and development with manufacturing. Outpaced by this cheaper and more responsive competition, Alcatel merged in 2006 with the American company Lucent, but losses and layoffs continued. In 2016, the Finnish company Nokia acquired Alcatel-Lucent, which then disappeared for good."
