R&D Incentives

Relations between France and the U.S. hit a new low last year when the French government did not support President George W. Bush in the U.S. invasion of Iraq.

But one fact has been buried in the furor over U.S. foreign policy: France and the U.S. are major trading partners with key auto-industry ties.

Visiting Detroit last month in conjunction with the 9th Annual Invest in France Awards, Clara Gaymard, ambassador at large and special representative of France for international investment, downplays the spat over the war and points out her country is one of the world's largest investors in the U.S. — and that American companies are the leading foreign players in France's auto industry.

Gaymard uses her visit to Detroit to focus on recent pro-business initiatives and try to lure technology-oriented automotive suppliers to France.

More than 3,000 French companies are operating in the U.S., providing 600,000 jobs, she says, and U.S.-based companies employ about 25% of France's 500,000 auto industry workers. The U.S. is France's No. 1 foreign employer in the auto industry, followed by Germany, she says.

The relationship between President Bush and French President Jacques Chirac is cordial, Gaymard says. Of far greater concern is the shifting of foreign investment to China, India and other low-cost locales.

“We fought the China issue 10 years before the U.S., we're very aware of the problem,” she says. She also says dealing with misconceptions over France's much-publicized 35-hour workweek has been a thorn in her side. That legislation has been changed.

“It was stupid to say 35 hours is for everyone. Even workers found it troubling,” she says in an interview with Ward's.

In 2003, France was second only to China in new foreign investment, and it recently announced a spate of new programs aimed at enticing more, including big tax credits for research and development investment, reducing taxes on foreign workers, allowing spouses of foreign employees to work in France and eliminating the need for a business permit for foreign managers.

Like other highly industrialized countries, France now is focused on nurturing high-skill, high-technology jobs. In the automotive sector, Gaymard also emphasizes that France is very interested in luring smaller auto suppliers to the country, not just giants that already have a large presence.

She says key technology areas being developed include diesel-engine control systems, injector and pollution-control systems and safety products such as airbags; electronics, nano technology, fuel cell development and advanced batteries.