by Elizabeth Pineau, Michel Rose and Gilles Guillaume
DUNKERQUE, North (Reuters) – Under the gold of a salon at the Palace of Versailles, the CEO of the Taiwanese battery manufacturer ProLogium cuts a battery the size of a credit card with scissors, under the gaze of the President of the Republic who can see it: the small bulb to which it is connected still shines.
The demonstration convinced the French head of state of the reliability of the product intended to equip the electric cars of tomorrow. “We will make your life easier and help you settle here,” he told Vincent Yang, who came from Taiwan to meet Emmanuel Macron on the occasion of the July 2022 edition of the “Choose France” summit organized each year in the palace of the Sun King.
Ten months later, the duo find themselves in Dunkirk, a port city in northern France where four “gigafactories” are on the way to reviving, via thousands of jobs, one of the most disadvantaged regions of the country, on the subject of the electric automobile.
Speaking in the middle of workers in black and red work clothes, Emmanuel Macron asks to applaud Vincent Yang, who chose this corner of France, preferred to others in Germany and the Netherlands, to establish his unique factory outside Taiwan.
In addition to ProLogium, the Chinese Envision AESC, the local start-up Verkor and the ACC consortium, a joint venture between the French oil company TotalEnergies, Stellantis and Mercedes, are setting up gigafactories in the same area – and automotive projects are loaned to the Chinese giant of electric vehicles BYD and Tesla.
The transformation of this deindustrialized region, where the world’s finest lace was once made, into the cradle of the green economy owes nothing to chance, show interviews with ten government officials and business leaders involved in investment decisions .
It also illustrates the industrial strategy initiated by Emmanuel Macron when he came to power six years ago.
“Results don’t fall from the sky,” he told Reuters in Dunkirk. “It’s in line with what we’ve been doing for six years. France is adapting to the world.”
When the former investment banker first sought the Elysee Palace in 2017, his far-right rival Marine Le Pen used a visit to a Whirlpool factory to challenge Emmanuel Macron to save jobs on this struggling site. The candidate then said he wanted to focus on investing in new technologies.
During his first term, the president passed pro-business reforms to make it easier to hire, fire and cut labor costs while lowering corporate taxes from 33.3% at 25% and introducing a flat tax of 30% on capital.
HANDS IN SEED
Emmanuel Macron has personally led the charm offensive with business leaders around the world, throwing himself into the battle to attract investment and jobs to French soil.
In 2018, he launched the first “Choose France” summit in Versailles, timed to coincide with the annual gathering of the world’s elite in Davos, in the Swiss Alps.
According to the story of the Elysée, this summit closed to the press is an opportunity for Emmanuel Macron to explain, in English and in detail, his reform program to the senior leaders invited during “speed-dating” sessions of about 30 minutes.
“He really gets his hands dirty,” one of his advisers told Reuters.
This pro-business line has a political cost insofar as it installs the label of “president of the rich” attached to Emmanuel Macron since his entry into the Elysée. The Versailles summits are regularly denounced by his opponents, who see them as a symbol of the president’s disconnection from the struggling French people.
The opposition also points out that investments in France create fewer jobs than in other countries and make France dependent on the goodwill of foreign actors.
“In Dunkirk there are Chinese and Taiwanese investors. We have to protect ourselves against risks, geopolitical for example. A shareholder can withdraw very quickly. How do we do it then, if we don’t have guarantees, no stake in the capital that ensures the future of the site?” Fabien Roussel, national secretary of the Communist Party, told Reuters.
When he travels abroad, Emmanuel Macron often adds economic appointments to his diplomatic agenda.
At the end of his Chinese tour in April, he thus met in Canton the manager of the XTC company which will manufacture lithium cathodes in the Dunquerkois as part of a joint venture with the French group Orano via an investment of ‘1.5 billion euros.
The presidential offensive has accelerated since the launch in August in the United States of the Inflation Reduction Act (IRA) aimed at developing “green” industry through massive subsidies, an offensive likely to endanger the European industry.
Emmanuel Macron sounded the alarm during his state visit to Washington at the end of 2022 where he denounced, in front of American lawmakers meeting behind closed doors, a “super aggressive” device for Europe. Back in Paris, he turned to the European Commission so that EU countries could subsidize companies at the same level as Americans.
ESSENTIAL SUBSIDIES
Brussels has agreed to relax its state aid rules, allowing the French government to whip out its own package of “green” tax credits.
“The usual level of support for big industrial companies is around 10-15%. Here it’s higher than usual,” Marc Mortureux, the head of the PFA car lobby, told Reuters. “We are now at support levels in line with the US IRA.”
As the recent opening of France’s first giga-battery factory in the north this week showed, the French government hasn’t been shy about committing taxpayers’ money to attract investors.
The ProLogium project could receive more than one billion euros in subsidies according to an industrial source, a figure – not confirmed by the company or by the French authorities – subject to change after examination of the file by the European Commission. The amount will be made public at the end of the year.
The ACC project received 846 million euros of public money in France and 437 million in Germany.
Gigafactories are also vital for car manufacturers if they want to compensate for the significant job losses expected in mechanical factories with the end of gasoline and diesel engines.
Jérémy Sarrazin and Jimmy Delrive, 44 and 48 years old respectively, piloted the machining of petrol engines for many years at the Stellantis site in Douvrin.
Respectively specialized in cylinder casings and connecting rods, two components that will have completely disappeared in the world of electricity, they joined the ACC battery factory where they will work after a 400-hour retraining.
“The world of mechanics and that of electricity are very different”, observes Jimmy Delrive. “The first day, we put on a suit, mask, charlotte, overshoes, we who were used to having blue and working in dust, oil, the smell.”
Their bet is like that of the region, which operates here no less than its third mutation in fifty years, after mines and heat engines.
“We are the only region in France to have put in place a location contract where we are able to guarantee the formalities in half the time, because with this contract all the actors who give the authorizations work in parallel, not successively, so half the time of other regions and other countries,” Xavier Bertrand, president of the Hauts-de-France region, told Reuters.
THE IRA THREAT
Elysée advisers often boast to journalists of an EY ranking showing that France is the first destination in Europe for the number of investment projects, ahead of Great Britain and Germany.
“The president is fighting for Europe whenever possible. But it’s also a race within Europe,” notes a French diplomat.
But the threat also comes from elsewhere. The American IRA has thus endangered the ProLogium project in France, an adviser to the head of state told Reuters. In April, a meeting was held at the Elysée with the Taiwanese group, which said it needed a “little extra” to convince its board of directors to invest in France.
According to the adviser, what sealed the deal was Macron’s promise that he would attend the signing ceremony in person, giving ProLogium some welcome publicity.
Beyond the welcome from the French authorities, Vincent Yang told Reuters that he appreciates the proximity of other battery factories and the access to low-carbon and cheap electricity in Dunkirk, close to the Gravelines nuclear power plant, one of the largest in Western Europe.
For his part, Emmanuel Macron sought, by this example, to demonstrate the merits of his policy in the face of public opinion hostile to his pension reform.
“It’s a win-win,” sums up an Elysian adviser.
(Report Elizabeth Pineau, Gilles Guillaume and Michel Rose, edited by Tangi Salaün)
