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Sparks fly as British firm e-mails pink slips to Paris

The French prime minister said Marks and Spencer 'should be punished' for layoffs announced last week.

By Peter Ford Staff writer of The Christian Science Monitor / April 3, 2001



PARIS

Marks & Spencer, that quintessentially British department store, has never found it easy to win over the fashion-conscious French.

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But even those Parisian consumers with a weakness for shortbread, sensible underwear, and pastel twin-sets have been scandalized by the retail giant's business style. It has the French government up in arms as well, revealing a gulf in attitudes far wider than the English Channel.

At 7:55 a.m. last Thursday, French Marks & Spencer managers, who were told to come in early, received an e-mail from HQ in London: All 18 stores in France are to be closed by the end of the year, as part of a worldwide restructuring that will cut more than 4,000 jobs.

At the flagship store on the Boulevard Haussmann in Paris, shocked staff locked the doors and shut up shop for the day as they pondered what to do next. Since then, management's "brutal" way of handling the layoff news, as Finance Minister Laurent Fabius described it, has drawn criticism from all quarters.

A procedure that might be perfectly normal in the United States or Britain - sudden layoffs as a company fights to stay competitive - is anything but normal in France, where people like to think that companies pay as much attention to their workers as they do to their shareholders.

"The case of Marks & Spencer is particularly unacceptable," French Prime Minister Lionel Jospin told his Socialist Party over the weekend. "The employees who enriched Marks & Spencer shareholders should be treated better."

Marks & Spencer CEO Luc Vandevelde, a Belgian, made no secret of his priorities. He said in a statement that he hoped to return $2.9 billion to shareholders next year, after a two-year slump in share values.

That approach is still uncommon here, although "day by day, it seems that France is converting to the sacrosanct principles of Anglo-Saxon capitalism, particularly that of 'shareholder value' - which makes profit for shareholders the principal goal to the exclusion of all social concerns," worried Le Monde, the daily that best expresses French establishment opinions.

But this outlook is not popular. When tiremaker Michelin announced 7,500 job cuts in 1999, just hours before declaring record profits, the French demanded government action. Mr. Jospin got himself into hot water just for saying that "you cannot expect the state to do everything."

This time, though, Jospin suggested that Marks & Spencer "should be punished. "Everything seems to indicate that the rules were not respected," he said sternly.

The rules, in France, say that any company that employs more than 50 people and is thinking of layoffs must tell employees first, and then consult them again before the firings are confirmed. Marks & Spencer did not do that, laying its CEO open to a $3,300 fine and up to one year's imprisonment.

It is laws like this that lead foreign critics to complain of European "labor inflexibility." Because it is harder to lay off workers, they say, companies are less willing to take them on in the first place.

Companies in the US have far fewer restrictions. Dell, Cisco, General Motors, and Coca-Cola, for example, have announced tens of thousands of layoffs in recent weeks as the economy slows down. That flexibility, they say, allows them to bounce back more quickly and rehire employees when they are in better shape.

France's track record over the past few years might give critics pause for thought, however. Since the Socialist government took office in 1997, France has created more than 1 million jobs, and unemployment has fallen from more than 12 percent to 8.8 percent of the workforce.

That proves, says the government, that you can be respectful of workers and still be productive, setting the stage for growth.

But you cannot convince "Anglo-Saxons" - as the French like to call the British and Americans - of that.

At the last European Union summit, French officials pushed for an EU-wide law on consulting workers affected by restructuring, based on the French model.

It was nixed - by the British.

(c) Copyright 2001. The Christian Science Monitor