Pechiney Employees Fight Cost-Cutting
On Wednesday, the lunchtime peace and quiet of La D"�fense, the futuristic commercial district of Paris and home to many of France's largest companies, was shattered by 1,000 or more Pechiney employees.
They were demonstrating against the aluminium and packaging group's cost-cutting programme. The cuts - known as project Challenge - aim to remove FFr4 billion ($774 million) from the company's cost base by the end of 1998, equivalent to about 20 per cent of overall costs excluding raw materials.
They will lead to a reduction of between 4,000 and 5,000 in the company's 37,000 worldwide staff and a 17 per cent reduction in the wage bill.
Management says this would put the group's earning capacity on a par with that of its strongest competitors.
Melanie Hucherard, analyst with Goldman Sachs, says Pechiney's performance is ''significantly behind'' its main North American rivals on an operating margin basis.
In 1995, these competitors achieved margins ''in the low teens'', against just over 5 per cent for Pechiney. But Hucherard is confident the aims of the Challenge project will be achieved. She says this would allow the group to catch up with the North American producers, assuming they make efficiency improvements of their own of no more than an average of FFr500 million a year. In scenes that are becoming familiar across the country as broad swathes of commerce and industry restructure to improve competitiveness, the demonstrators marched rowdily from the late President Fran"�ois Mitterrand's Grande Arche to Pechiney's squat headquarters, banging oil drums and dropping fire-crackers.
Once assembled in front of the building, men and women in grey smelter suits used cardboard stencils to spray-paint hundreds of human outlines on the ground in representation of those they said would lose their jobs.
Long live Riouperoux'' was daubed in red paint on the company's front door - a reference to the solitary French plant expected to close as a result of the cuts.
Financial Times
There were inevitably chants for the resignation of Mr Jean-Pierre Rodier, Pechiney chairman. They had come from all corners of France, reflecting the broad geographic spread of the company's main production facilities, leaving by coach and train from Alsace and Annecy as early as four in the morning. Their determination should act as another warning to hard-pressed government ministers of how carefully they will have to tread in overseeing the reshaping of France's industrial landscape at a time when the jobless rate is at a record 12.6 per cent.