French Foreign Exchange

 

"Invest in France today? Your company's management must be mad!" a French businessman told the vice-president of a large American multinational firm. Yet at a time when many French companies hesitate to put money into a Socialist-run country, giants like Ford, Hewlett-Packard, Union Carbide, and Quaker Oats -- among more than 1,000 U.S. firms already in France -- continue to build new plants in the country.

A recent Wall Street Journal article claims most foreign investors -- including Americans -- are leery of the new government; but many American businesspeople disagree. They say that French officials have been more accessible to Americans since Mitterand was elected, perhaps because the government needs capital to create the jobs that will reduce unemployment.

Jean-Paul Ange, director of the French Industrial Development Agency (FIDA), the U.S. arm of DATAR, France's regional development agency, maintains his government is actively wooing smaller companies. "To compensate for the impact of nationalization of many of our larger industries, the Socialist government has launched a program to encourage small and medium-sized enterprises, both foreign and domestic," he explains. The seven-point program includes loans, loan guarantees, tax breaks, and simplification of paperwork for smaller firms.

The American Chamber of Commerce in France reports much faster processing of project approvals since the new government took office. Macrodyne Industries Inc., a Los Angeles-based precision machine parts manufacturer, with 1981 revenues of $48.5 million, had a joint venture approved eight days after the French received a thorough explanation of the project.

Macrodyne owns 51% of a company formed with Malichaud et Cie, a machiner of jet engine parts. The new firm will employ 300 in a plant it will build this year in Parthenay. DATAR was instrumental in obtaining cash grants from the French government of approximately $5,000 for each job created. DATAR is also assisting Macrodyne-Malichaud in obtaining a loan at favorable rates.

Macrodyne chose France over Ireland, Scotland, and Belgium for its plant site. "DATAR really has its act together. Their Los Angeles office was very helpful," says Macrodyne chairman and president James M. Matarese.

DATAR also brought together Applied Micro Circuits Corp. (AMCC), a San Diego-based computer-components manufacturing firm with about 125 employees, and SOREP, a French manufacturer of high-tech products. The two firms are discussing a joint operation that by 1984 could employ 300 in the now depressed area of Chateaubourg, Brittany.

SOREP is entering into another joint venture with Hybrid Systems Corp. The Billerica, Mass.-based company, which does 25% of its $13 million in sales in Europe, will license the venture to manufacture its hybrid integrated circuits in Europe; within a year and a half it plans to build a new plant in France. "By linking up with SOREP, we can provide better service to our Common Market customers and save the cost of duty," says L. Wayne Peacock, president of Hybrid.

While half of the 100 upcoming American projects in France are related to electronics, Jacques Waline, director of industrial development for DATAR, says, "We would really like to talk to any American company considering expanding abroad."

French manufacturers are also seeking U.S. companies to market their products in this country. To counter a $5-billion trade deficit in 1980, the government "readjusted" the franc, making many French products real bargains for Americans.

Made in France International, an English-language quarterly, goes to a worldwide list of buyers, providing them with information on firms seeking to tap the U.S. market for the first time.

Copies of Made in France International may be obtained by writing to Made in France International, B.P. 509, 75066 Paris Cedex 02 France. Most French consulates receive copies.

DATAR's FIDA offices are at 610 Fifth Ave., New York, NY 10020; 401 N. Michigan Ave., Suite 3045, Chicago, IL 60611; and 1801 Avenue of the Stars, Los Angeles, CA 90067.

Opportunities for a variety of joint ventures with French firms are listed bimonthly by the American Chamber of Commerce in France and can be obtained by writing Greta Davis, Director of Public Relations & Commercial Services, 21 Avenue George V, 75008 Paris, France.