The reasons why Motorola chose France

Khaldoun ANASTAS

Olivier BROCHE

Denis FEDERICO

Gwendoline KASTLER

Guerric PHELIP

Morgan VAN BAREN

Mastère Spécialisé Management de Grands Projets

Synopsis • Motorola• About the Crolles center• Typical French assets• Typical French drawbacks• Specific reasons for Crolles2

Motorola in the World • Global leader in integrated

communications and embedded electronic solutions

• 30 bln$ TO, 110,000 employees around the world

• Developing different activities in telecommunications and electronics

Motorola in France

• In 1967 Motorola chose France to set up its first non-American factory

• 3,100 employees on 4 sites : Paris, Angers, Toulouse, Crolles

• Vehicle electronics, mobile phones, semiconductors, R&D and sales

About the Crolles Center (1/3)

• April 12th 2002, Motorola joins Philips (Europe n°1) and STMicroelectronics (World n°3) at Crolles

• Pre-existing European alliance between Philips and STMicroelectronics

• An alliance due to excessive R&D costs

About the Crolles Center (2/3)

• Technical Goal : next generation system-on-chip (SoC) product development for low-power, wireless, networking, consumer and high-speed applications

• Strategic Goal : World leadership of nanometric technologies for SoC

2 major goals

About the Crolles Center (3/3)

• Total Investment : 2.8 bln€, over the next 5 years, equally supported by all three members

• Largest investment on French territory of the last 10 years

• 1,500 direct jobs and 4,500 indirect jobs created

Typical French Assets (1/2)

• High Quality infrastructures• High Quality telecommunication

services• Free and national healthcare system• High Quality of life• Excellent free and national education

and training system

Typical French Assets (2/2)

• Economic and political stability• Central position in Western Europe• Member of the euro zone• Abundant and low cost energy

Exceptionally attractive environmentExceptionally attractive environment

Typical French Drawbacks (1/2)

• High labor taxes• High production taxes• High taxes on managers’ wages• Powerful French unions (Strikes,…)• 35-hour week policy

Typical French Drawbacks (2/2)

• “French Specific” attitude• Fab Closing or moving is very expensive• Unfavorable stock-option policy

Specific reasons for Crolles2 (1/3)

• Motorola’s favorable history• Necessary grouping• Existing alliance between Philips and

STM

From our interview with Mr. Lavigne

Specific reasons for Crolles2 (2/3)

• French R&D assets– Brains– Research Credit Tax unique in the world– 1/2 of the European R&D centers are in

France

From our interview with Mr. Lavigne

Specific reasons for Crolles2 (3/3)

• Government implications– France is the 2nd leading country for large

projects– Active AFI– Crolles2 project signed in 6 days– 108,000 € tax reductions and other incentives

for every job created

From our interview with Mr. Lavigne

Conclusions

• Crolles2 implantation is successful• France is attractive for R&D• … But : if taxes were lower, the HQ

would come more easily to France

HQ + R&D = IndustriesHQ + R&D = Industries