SHARE
COPY LINK

CHINA

The shuttered French ‘ghost factory’ where staff still turn up for work

Every morning the employees of the Sodimedical hospital supplies company in the small town of Plancy L'Abbaye in eastern France show up for work in their shuttered factory.

They haven’t been paid in six months, since Sodimedical’s German parent company Lohmann & Rauscher moved their jobs to cheaper factories abroad.

Yet still they go to work every day, a symbol of the brutal de-industrialisation that hit France in the last 30 years and has become a key issue ahead of the first round of the country’s presidential vote on Sunday.

All the candidates have vowed to return French industry to its former glory, with right-wing President Nicolas Sarkozy promising tax cuts to help factories survive and Socialist Francois Hollande offering state investment.

In the meantime the workers at Sodimedical, abandoned and increasingly in despair, struggle to pay their bills with no solution in sight.

“It’s outrageous,” said their spokeswoman, 33-year-old Angelique Debruyne. “There is no consistency between what is being said in the campaign speeches – that we must produce in France – and the reality on the ground.”

That reality hit home for the 47 women and five men who worked at Sodimedical in April 2010, when Lohmann & Rauscher announced it was closing the factory’s doors to relocate operations to China and the Czech Republic.

“That night when I went home and told the children, I was lost,” said one of the employees, 42-year-old Nadine Kapusta.

“I have no degree, no other training, there is nowhere else to go and I have bills to pay,” she said.

For 15 years and more, employees followed the same routine – cutting, folding and assembling textiles for hospitals, at the plant in Plancy-L’Abbaye, a town of 1,000 in the Aube region 160 kilometres (100 miles) east of Paris.

Charts still hanging on the wall in the factory show productivity was rising and the workers were confident, buying bungalows on credit.

But a few years ago things started to change. A group of Chinese businessmen visited the factory and took pictures. Managers noted that a factory had been set up in China to make the same products.

Finally, in April 2010, the axe fell.

Employees were told the factory was moving and they could keep their jobs only by relocating to China on a salary of 120 euros ($156) a month or to the Czech Republic for 400 euros per month.

They balked.

“It was a shock. We could understand if a factory closes because it is in difficulty – but not if it’s to boost profits on the backs of employees,” said Veronique Aubert, 38.

The employees had little hope of finding other work. They were on average 45 years old, with no degrees and highly specialised skills of little use elsewhere.

Once a powerhouse of the French textile industry, the Aube region has seen the number of employees in the sector fall from 24,000 in the 1980s to only 4,000 today.

The employees launched a campaign to save their jobs, hiring a lawyer and filing more than 30 legal cases against Lohmann & Rauscher, which declared Sodimedical bankrupt.

Each time the courts has ruled in their favour, but nothing could be done. Production ceased and the employees sit in the ghost factory every day, knitting, talking and growing increasingly worried.

Help has poured in from the community, with private donations made to help support the workers and the local priest fundraising. But the employees say their bills are piling up and there seems no hope of a turnaround.

Local mayor James Lionnet worries that his once-prosperous town is slowly dying with each factory that closes.

“This means less investment in the area, less work for bricklayers or floor tilers, losses for businesses,” he said. “And if people have no jobs, they will leave.”

For members

ECONOMY

How is Denmark’s economy handling inflation and rate rises?

Denmark's economy is now expected to avoid a recession in the coming years, with fewer people losing their jobs than expected, despite high levels of inflation and rising interest rates, The Danish Economic Council has said in a new report.

How is Denmark's economy handling inflation and rate rises?

The council, led by four university economics professors commonly referred to as “the wise men” or vismænd in Denmark, gave a much rosier picture of Denmark’s economy in its spring report, published on Tuesday, than it did in its autumn report last year. 

“We, like many others, are surprised by how employment continues to rise despite inflation and higher interest rates,” the chair or ‘chief wise man’,  Carl-Johan Dalgaard, said in a press release.

“A significant drop in energy prices and a very positive development in exports mean that things have gone better than feared, and as it looks now, the slowdown will therefore be more subdued than we estimated in the autumn.”

In the English summary of its report, the council noted that in the autumn, market expectations were that energy prices would remain at a high level, with “a real concern for energy supply shortages in the winter of 2022/23”.

That the slowdown has been more subdued, it continued was largely due to a significant drop in energy prices compared to the levels seen in late summer 2022, and compared to the market expectations for 2023.  

The council now expects Denmark’s GDP growth to slow to 1 percent in 2023 rather than for the economy to shrink by 0.2 percent, as it predicted in the autumn. 

In 2024, it expects the growth rate to remain the same as in 2003, with another year of 1 percent GDP growth. In its autumn report it expected weaker growth of 0.6 percent in 2024.

What is the outlook for employment? 

In the autumn, the expert group estimated that employment in Denmark would decrease by 100,000 people towards the end of the 2023, with employment in 2024  about 1 percent below the estimated structural level. 

Now, instead, it expects employment will fall by just 50,000 people by 2025.

What does the expert group’s outlook mean for interest rates and government spending? 

Denmark’s finance minister Nikolai Wammen came in for some gentle criticism, with the experts judging that “the 2023 Finance Act, which was adopted in May, should have been tighter”.  The current government’s fiscal policy, it concludes “has not contributed to countering domestic inflationary pressures”. 

The experts expect inflation to stay above 2 percent in 2023 and 2024 and not to fall below 2 percent until 2025. 

If the government decides to follow the council’s advice, the budget in 2024 will have to be at least as tight, if not tighter than that of 2023. 

“Fiscal policy in 2024 should not contribute to increasing demand pressure, rather the opposite,” they write. 

The council also questioned the evidence justifying abolishing the Great Prayer Day holiday, which Denmark’s government has claimed will permanently increase the labour supply by 8,500 full time workers. 

“The council assumes that the abolition of Great Prayer Day will have a short-term positive effect on the labour supply, while there is no evidence of a long-term effect.” 

SHOW COMMENTS