Tuesday, December 20, 2011

An Industrial Success Story?

Le Monde tells the story of the Bosch plant in Vénissieux, which was slated for closure by the firm but won a new lease on life thanks, we are told, to German-style cooperation between employer and trade unions (CFDT and CGT). Instead of closing the plant, Bosch eventually agreed to invest 25 million euros to convert it to the manufacture of photovoltaic cells. 450 employees were laid off, but 400 others were retrained and retained. This sum is one-quarter of what it would have cost to close the plant.

The story is nevertheless a bit vague about the economics, since we know that China has been accused of dumping photovoltaic cells below cost in the US, undermining domestic competition there. Why is this not happening in Europe? What is the long-term economic viability of this new product line? What other concessions were made to Bosch to preserve these 400 jobs? The case bears further investigation.

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