France is a country with more than its fair share of great industrial leaders. This is largely due to its steadfast policies in favour of growth and corporate mergers, which have produced world leaders in the pharmaceuticals, banking, steel, automobile and oil industries. So why the surprise or concern at the profits they are making? Should we not, on the contrary, be rejoicing in their success? Their profits, on a par with those of their competitors, are the only real guarantee of their independence.
The French have welcomed the emergence of these industrial champions, but find it hard to accept what it takes to stay ahead of their international competitors. This paradox may well seem surprising. Why should anyone have any interest in seeing our firms, brand names, products or services relegated to the sidelines of a constantly changing global economy? It is all the more surprising to see France’s disaffection with its “industrial champions” when these enterprises are so much admired elsewhere in the world.
Total, the world’s fourth-largest oil and gas group, which it is my honour to head, now ranks among the most prominent firms on the international stage. So what, you will say? After all, it is so much more fashionable to scoff at successful firms and their workforces who, through trade, promote French economic and industrial excellence. So much so, in fact, that the high-flying Total group is now an object of suspicion, drawing disapproval, and claims that we owe our performance solely to a healthy economic environment and a favourable business climate. Total is accused of freeriding, which belittles all its efforts to gain market shares or promote expansion. In other words, we do not deserve our success.
Yet our growth, higher than that of the competition or the oil market, has shown how right we were to adopt a pro-active long-term strategy, launched in the 1990s and boosted by a three-way merger. The aim was to achieve critical mass in a market where geographical coverage, investment capacity and performance are the keys to economic survival.
Should we be embarrassed at our successes? Our performance today is a guarantee for tomorrow, for the future of the group and its independence. Corporate growth in the oil industry depends on maintaining high levels of investment. In 2005, Total will have poured $12 billion into project development. This investment policy has never wavered, even when oil prices were low.
Now that competition is keener than ever, our teams of researchers, explorers, producers and refiners have been successfully fighting to gain access to new areas for oil and gas exploration and production, and to invent the new technologies that will enable us to develop what are currently thought to be inaccessible sources of energy.
Yet these teams must bear in mind two vital factors: competitiveness and efficiency. Both are crucial if we are to sustain our performance, regardless of the economic environment. The same two factors today govern consolidation in our chemicals branch, where we are facing some hard decisions on the social front; when the time comes, we will do all we can to carry out those decisions in an exemplary manner and with the highest regard for the people involved.
Is Total solely concerned with making money for itself and its shareholders? Is it putting its workforce second? An enterprise is a community of mutual interests: its own, those of its clients, those of its shareholders and those of its workforce. This combination is the foundation for the whole edifice. It is what drives us forward.
Total rewards those who have risked their savings so that the company can invest in development. And the group also rewards, encourages and motivates its workforce for contributing to its success. Driven by its determination to be socially innovative, Total has developed a policy of employee stock ownership on a scale unique in France. With €4 billion in corporate stock, Total’s workforce is the largest employee stock ownership group in the country. This is how Total asserts its policy of promoting shared growth and a shared future.
Even if it is fashionable to be disparaging about industrial champions, let us behave responsibly by putting an end to this “French paradox”. We should all be proud at having built up a world-class national business in the hydrocarbon market, which for so long has been an exclusively Anglo-Saxon preserve.
*This article originally appeared in the French daily Le Monde, dated 2 April 2005 under the title “Se battre, gagner et s’en réjouir” (Fight, win and enjoy!). This English version was produced by the OECD Observer.
©OECD Observer No 249, May 2005