France Fears 'Economic War' over Renault Leaks

Jan. 6, 2011
The Renault suspensions were the latest in a series of industrial espionage shocks to hit France's huge and strategically important auto industry. Michelin and auto parts maker Valeo have also been the targets of spying.

France's industry minister warned on Jan. 6 that the country faces "economic war" after revelations that industrial espionage at Renault had targeted the automaker's key electric cars division.

"The expression 'economic war', while sometimes outrageous, for once is appropriate," said Minister Eric Besson. "It (the Renault case) appears to concern the electric car, but I do not want to go further."

Renault, which has suspended three managers for leaking company secrets, was also giving little away about what happened but said on Jan. 6 that its "strategic, intellectual and technological assets" had been targeted.

The company and its partner Nissan have staked their future on electric cars and plan to launch several models between them by 2014 to meet the rapidly rising demand for more environmentally friendly methods of transport.

"For Renault, this is a very serious incident concerning persons in a particularly strategic position in the company," said senior vice president Christian Husson, a day after the firm suspended the three managers.

A months-long probe had established a "body of evidence which shows that the actions of these three colleagues were contrary to the ethics of Renault and knowingly and deliberately placed at risk the company's assets," Husson said.

The suspensions were the latest in a series of industrial espionage shocks to hit France's huge and strategically important auto industry. French tire maker Michelin and auto parts maker Valeo have also been the targets of spying.

The industry minister said that he wanted firms which receive state aid for research and development to boost efforts to protect themselves against espionage. The car industry, along with aerospace, defense and pharmaceutics are the sectors most affected by espionage, experts say.

"When you need 10 years to bring out a vehicle, 12 years to get a pharmaceutical molecule to the market, 20 years for a plane... the temptation to plunder is obviously strong," said Bernard Carayon, a French member of parliament and economic intelligence expert.

France itself is the top offender when it comes to industrial espionage, and is even worse than China and Russia, according to a leaked U.S. diplomatic cable that quoted the head of a German company.

"France is the evil empire (in) stealing technology, and Germany knows this," Berry Smutny, the head of German satellite company OHB Technology, was quoted as saying in the diplomatic note obtained by WikiLeaks.

Electric car technology is a particularly prized asset at Renault. It plans to launch electric versions of its Fluence model priced at about $34,000 and its Kangoo Express for about ?20,000 in mid-2011, and its smaller Twizy and Zoe models in late 2011 and 2012.

It forecasts that electric cars will make up 10% of the market by 2020. Along with its Japanese partner Nissan, it is investing 200 million euros a year in the program. Nissan has already launched an all-electric car for the mass market, the Leaf, in Japan and the United States, where it sold out on pre-orders. The Leaf is set to be launched in select European markets in early 2011.
Other top car makers are in on the act, preparing to launch electric cars. Among Renault's French competitors, Citroen is making the C-Zero and Peugeot the iON. Tata of India is preparing to launch the Vista EV.

Mercedes-Benz of Germany has an electric smart car, the Fortwo ED, while in Japan Mitsubishi has the iMiEV and Toyota the Prius Plug-in.

Copyright Agence France-Presse, 2011

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