HAF "You always have to ask yourself, what kind of fog am I in that I can't see?"

9 min reading time

Published on 01/12/22 - Updated on 23/12/22

Hospitality Asset Forum Nicolas Dufourcq

Nicolas Dufourcq, CEO of Bpifrance [Public Bank of Investsment], comes back to an observation he shared in his book La désindustrialisation de la France: 1995-2015 [The deindustrialisation of France], published in June 2022.

The Bpi, which I manage, is a major financer of French tourism. We finance entrepreneurs and the Banque des Territoires finances the walls. We finance entrepreneurs massively, whether in loans or in equity. In terms of equity, we have the Fonds Investissement Tourisme, the Caisse des Dépôts being one of our Limited Partners, as well as the European Investment Bank, we also provide equity.

When we make higher investments, such as for Pierre & Vacances-Center Parcs, we mobilise other mechanisms. To date, Bpifrance has about 46 billion euros of assets under management. Between investments and disposals, we carry out about 500 operations each year. This mobilises a management company of 700 people, a force that is necessary to manage the many small tickets that we make for around 1 to 2 million euros in equity.

We also make many loans to the hotel industry and the origin of the creation of the Bpi is the hotel loan in 1923. It all started with this activity created by the hoteliers of the City of Paris. After the Popular Front, missions of general interest were added. Many things were gradually created and merged in 2013 to create the Bpi.

We are seeing from our customers an excellent economic situation with a remarkable post-covid recovery. We are doing very well in all areas of our business in the tourism sector at the moment. Whatever the product, equity, credit, short or very long term. The accelerators that we have created for tourism professionals are also doing very well.

The industry is doing better, compared to the period I describe in my book. Bpifrance is a major bank for industry, and of the €46 billion of equity capital that we manage in companies, 65% is invested in industry. We are a substantial shareholder in Stellantis, in ST Micro in Grenoble... These are also 25% of our credits each year, while industry represents 10% of the GDP.

I gradually took the decision to dig out what had happened to all of us in the 2000s so that the size of French industry was divided by a significant x. This resulted in considerable job losses and the loss of almost half of our factories.

When I took over as head of the Bpi at the end of 2012, 10 years ago now, I had absolutely no time to ask myself what had happened. The priority was to restore morale. We decided to take the lead with positive communication, as bright as possible, very direct and with important code changes. The objective was to give new impetus to those players who had not died during the period of deindustrialisation. This remains a priority, which is why we launched the French Fab' movement with the blue rooster, the emblem of French industry. A banner based on pride and self-confidence to create a feeling of belonging to a collective, dynamic, warm and powerful movement. The aim is to make them want to invest their money in French industry.

How did I come to want to deal with this question of "What happened to us in this period of deindustrialisation? Before writing this book, I wrote one about German reunification. I wrote that book in honour of my diplomat father who had negotiated German reunification. As director of political affairs at the Quai d'Orsay at the time, he had negotiated the treaty with the German directors, the Russian directors, the American director and the British director. I interviewed 40 diplomats of the time to find out what the negotiations were like at the end of the Cold War and the beginning of globalisation. This approach allowed me to interview Germans who told me about the years 1989, 90 and 91 and how immediately in this negotiation the new Germany was anchored in the West by the Euro. The euro treaty dates from September 1990 and the Strasbourg summit from December 1990. The Strasbourg Summit was what launched the great negotiation that would lead to Maastricht in 1992.

The German negotiators told me during these exchanges that they were in favour of the Euro because they wanted to anchor Germany in the West. Faced with Comecon, which was on the borders of West Germany, it was necessary to anchor Germany to the West through NATO and the Euro. The Germans were surprised by the lack of consideration of the changes to come by the French. The French were constantly devaluing, 16 devaluations corresponded to French methods of restoring purchasing power financed by devaluation. The Italians, Spanish and Portuguese operated with the same system. These octogenarians told me that when they saw us going ahead with the construction of Europe, they thought that we had understood that since we could no longer devalue, we were going to implement an offer policy.

After 10 years of competitive disinflation (1985-95), this system was dropped to give priority to the fight against mass unemployment and to return to a very Keynesian policy of demand. Wage increases and work sharing with, only in France, a debate on a society of leisure, service, fab'less predicted by Jean Fourastié in 1949. As soon as France qualified for the Euro, the de Robien law was passed as the first step towards the 35-hour week. After the removal of the ceiling on the wealth tax, the Dutreil law was passed with a full house to regulate the wealth tax and the transfer of property within families. Between 1993 and 2003, a lot of ETIs were sold, many of them to foreigners who, when it came to closing factories, closed French factories as a priority. France was considered in Europe to be the worst country for industry. Employers' contributions continued to increase during this period. 8 points of contributions were added to the cost of labour.

The Germans actively prepared for China's entry, but France did not prepare for the Chinese industrial offensive linked to their entry into the WTO. At the time, we were very proud to have resisted Japan. However, China corresponds to 25 Japons. We were able to cope with the first waves of Japan at the time because there were borders. On 15 December 2001, China joined the WTO and the 35-hour working week came into force on 1 January 2002.

One might ask what led to such profound misinterpretations. Why was there so much fog to prevent people from reading the data on the problem? This is the question I asked myself in this book because it is a situation that can happen again. You always have to ask yourself, what fog am I in that I can't see that's hallucinating me and making me do things that will be called crazy in 30 years.

This is what happened to the French ruling elite on this turn of the tide of globalisation.

The good news is that since 2015, more factories have been opened than closed. Since 2010, we have been in a supply policy in France. At some point the fog lifts and we hear the complaints of the unemployed, entrepreneurs, mayors, presidents of general councils who are sounding the alarm and the reality has imposed itself after the Lehman Brothers crisis. A supply policy was launched with the removal of the ceiling on the research tax credit, the future investment programme, the strategic investment fund and the competitiveness clusters. We put the entrepreneur back at the centre of the pantheon of French heroes by creating, among other things, self-employed entrepreneurs. It was during this period that a team was created for the creation of the Public Investment Bank. This was followed by the competitiveness package, the Gallois report, the CICE, Manuel Walls' responsibility package, and the five labour law reform laws. This is the moment when the door of France turns on its hinges, which made all the noise we could hear. It was a very difficult change to make, to turn France around at that time, it took a lot of courage. We must pay tribute to all these actors, from the right and the left wing of the politics.

For 14 years we have been in a supply policy with the ambition to keep costs down as much as possible, to reindustrialise, to breathe new life into investment with the future investment programmes, 54 billion euros invested in France 2030. We are in a remarkable continuous effort, which must continue for a long time so that we succeed in reindustrialising just a little. To gain 2 points of GDP from industry in the next 15 years, we need another 15 years of supply policy, and we also need much more electricity and manpower in the sector. If we don't make this effort, the industry will fall to 8% of GDP and will continue to fall and eventually we won't be able to make our own armaments. So it's very important what's at stake here and we're trying to turn over every stone to get there.

What is difficult at the moment is that we did not foresee this energy crisis which arrived during a period of progress that began in 2015. The 10 billion euros mobilised to enable SMEs and ETIs to cover part of the additional energy costs are very important. Unfortunately, it is at this stage that we can see once again that France has not yet completely turned the corner, those who have been supported in priority are households. 100 billion have been allocated to households, which leaves little room for the economy. In Germany, 200 billion have been allocated to the economy.

In the end, the plan that has been announced should allow many companies to weather the storm, and electricity prices should fall by the end of 2023. It is a long storm but we must be vigilant so that the entrepreneurs who expose their assets in the industry do not give up.

Hervé Novelli : We can also tackle the subject of reindustrialisation through the construction of buildings. We cannot reindustrialise without building modern, non-polluting factories. The construction period in France is extremely long. For the group that I advise, the decision was taken in 2017, it took 5 years to obtain the authorisations from the public authorities, the building permit was just delivered a month ago in 2022. There are now the appeals which should be purged in 3 years, followed by 2 years of construction. So a project in France, which is not particularly polluting, takes 10 years. How can we ensure that the industrialist faced with this does not make trade-offs in order to keep up with a very high growth in demand and produce elsewhere? This is a major and strategic issue that has not been addressed to date.

Nicolas Dufourcq : We can be reassured by looking at the other European countries. We are currently seeing Germany change, and this state that you describe was also true in Germany until 18 months ago. Now in Germany the leaders are talking about a new concept, the Tesla Speed. This refers to the speed with which Tesla has set up its factory with the support of the German government, which has broken down a number of barriers. This was the case in France for Eurodisney or for the Toyota factory in Valencienne. Where there is a will there is a way. My answer to this state of affairs is pure political will, we will have to isolate in France a certain number of large extraterritorial wastelands in which we will have to massively accelerate the deadlines. There is also the simplification law which is currently being voted on but which essentially concerns renewable energy.

I have always thought that when something is obvious, it always ends up being done. On a longer and deeper level of culture, in certain layers of the prefectural function. There are some departments where it is much faster because the prefect is business-oriented and decides to take over his DREAL.



Investisseur / Finance

  • Bpifrance France
For further

Every week, the HON team brings you an expert look at the world of hospitality. By becoming a member, you will have access to a complete ecosystem: exclusive content, jobs, etc.


Sign up to add topics in favorite. Sign up to add categories in favorite. Sign up to add content in favorite. Register for free to vote for the application.

Already signed up? Already signed up? Already signed up? Already registered?