“Stay, don’t go.”
According to several French media reports, French President Macron recently hosted a dinner at the Elysee Palace, the presidential palace. He invited many European entrepreneurs in the hope of convincing them not to move their industrial lines to the United States.
It is reported that Macron tried to send a message that stay in Europe and choose France as a country for future investments to the executives of companies including BMW, Unilever and AstraZeneca who attended the banquet. The intentions of the French authorities are still quite clear. At a time when the Russian-Ukrainian conflict in Europe is intensifying and the energy crisis is difficult to alleviate. France does not want corporate investors to leave.
The president of the French Dassault Aviation Group and the president of the French Metallurgical Industry and Industrial Union, Trappier, answered the press that many entrepreneurs regret the decision to invest in the European Union made in the previous period. They are mainly worried about the high energy prices that seriously affect the competitiveness of their products.
This retention of important companies is more common in France, and even in other European countries. Although France pursues a free economy, government intervention in the economy is still very large in reality.
There are two main reasons why European companies choose to relocate out of Europe, one is the soaring costs of companies highly dependent on energy and forced to choose regions with lower energy prices and guaranteed supply.
There are two main reasons why European companies choose to relocate out of Europe, one is the soaring costs of companies highly dependent on energy and forced to choose regions with lower energy prices and guaranteed supply.
Secondly, geopolitical conflicts exacerbate the difficulty of international transportation which makes raw materials or sales sites mainly concentrated outside Europe. Enterprises choose to move to the United States as the representative of North America, or China as the representative of the Asian region.
【The Lure of America】
Macron’s actions are also directed at a series of U.S. corporate preferences.
French President Emmanuel Macron will make a rare state visit to the United States this week. The purpose is to emphasize Franco-American friendship rather than the fierce economic rivalry between the two (Atlantic) sides.
A French official said that France does not have an advantage for companies that are beginning to consider outsourcing production or investing outside Europe. Europe’s current high energy prices are pushing up the cost of gas and electricity which gives burden on European companies.
EU battery producers who have just given rise to optimism are also considering moving out of the US. For example, Sweden’s NORTHVOLT is preparing to leave Germany for the United States.
These pressures will force France and the EU seriously consider their corporate and competitive strategies. The Federation of German Industries recently warned that 1/4 of German companies are considering shifting production to other countries due to high inflation and energy costs.
Many companies in the EU are considering whether to relocate out of Europe in the face of the energy crisis. The business community is considering several options for destinations, the main point is stable and cheap energy prices and easy shipping counties, especially in North Africa and North America. The Indo-Pacific region is also an area for companies to consider. The current decline in shipping prices has also increased the determination of enterprises to move out.
The government is likely to introduce relevant subsidies and tax cuts and other policies, so that companies can see the actual action to retain in the next.