Thursday, April 11, 2013

Sanofi and the Future of France

Sanofi is a drug company with a research facility in Toulouse, France.  The facility needs to be closed.  It is a research facility that hasn't produced a new drug in twenty years and costs are prohibitively high in any event.  600 workers are employed there.

So, what happens when Sanofi decides to close the plant?  Mass demonstrations and a protracted legal battle.  In the end, Sanofi will be refused by the government and the plant will stay open, regardless of what Sanofi shareholders want.

So, what happens when another company is considering opening a plant anywhere in France?  They will think about Sanofi's troubles and look elsewhere.  Markets work and learn -- which is bad news for France, a country with a declining GDP and absurd economic programs.

Obama thinks that they are on the right track.  I guess it depends on what destination you are shooting for.

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