October 8, 2015
By Mark Terry, BioSpace.com Breaking News Staff
Paris-based Sanofi reported meetings yesterday with French union officials, revealing some tricky obstacles ahead. Of the company’s 110,000 worldwide employees, about 27,000 are in France.
Sanofi indicates it will present a five-year strategic plan in November after it reports its third-quarter results. Olivier Brandicourt, chief executive officer of Sanofi, indicated concerns over industrial site costs and their effects on Sanofi’s gross profit margin, pushing for French union workers to work longer hours, cutting the number of vacation days, and rearranging duties.
“They say there is a competitiveness problem, but they haven’t demonstrated it to us,” said Patrick Rojo, a leader at CGT union, as reported by AFP.
Sanofi is hoping to increase productivity to 20 to 25 percent over a three-year period at its plants in France. The company argues that its French sites need to improve productivity in order to keep up with its facilities in eastern Europe.
The first meetings with unions were on Sept. 29, and two more are scheduled for Oct. 14 and Nov. 2. Sanofi’s release of its five-year-strategic review is scheduled for Nov. 6.
“We want to preserve our competitiveness in France in a sustainable way,” a Sanofi spokeswoman reported to Reuters. “Only one negotiation process is currently underway at the level of pharmaceutical production in France, which excludes vaccines, animal health, biological products.”
In June, French union officials reported that they also intended to discuss salary increases in the wake of a two-year pay freeze.
This could be a dicey issue for Brandicourt. His predecessor, Chris Viehbacher, also clashed with French union officials, which expanded to battles with France’s former Minister of Industrial Renewal, Arnaud Montebourg, who is rumored to be running for president of France in 2017. There were other issues between Viehbacher and the Sanofi board, but unions and job cuts were significant problems and in late October 2014, Viehbacher was fired.
Viehbacher had attempted to cut about 2,500 jobs, a decrease in about five to seven percent of its workforce. These cuts were met by union strikes and public protests. Eventually Viehbacher slashed about 900 jobs in a process that dragged out for months.
France’s unions have a history of having a lot of clout. It’s not, according to The Economist, because there are so many union members. In France, less than eight percent of employees are union members, significantly lower than the 30 percent rate in the 1950s. “French union strength today is the statutory powers they enjoy as joint managers, along with business representatives, of the country’s health and social-security system, and as employee representatives in the workplace. Under French law, elected union delegates represent all employees, union members or not, in firms with over 50 staff on both works councils and separate health-and-safety councils.”
Company heads, as a result, are required to consult with these union representatives on a broad array of managerial decisions. In essence, unions in France have significant input in the day-to-day operations of companies in the private sector.
