Renault’s handling of suicides could be a test case

It is widely acknowledged that work-related stress is a big cause of occupational ill health. It often arises when employees perceive that they cannot adequately cope with the demands made on them by managements which, for the best of motives, are anxious to ensure their companies can address the ever-increasing challenges of global competition. At its most extreme, it can drive workers over the edge.

Take the disturbing series of suicides at Renault’s flagship technical centre outside Paris where 12,000 engineers and technicians design and develop the French car group’s models – the latest only this week.

While it is impossible to make a direct link between these tragedies and pressure at work, the unions have inevitably called into question the tougher management introduced by Carlos Ghosn since the famous cost-cutter took charge two years ago.

There has certainly been a change of culture at Renault since Mr Ghosn arrived. But then, times have changed and Renault needs to become more competitive. Its European and Japanese rivals have been gaining ground, especially in its European market. And Renault’s Japanese affiliate, Nissan, also headed by Mr Ghosn, has been stalling.

Mr Ghosn has targeted 2009 as the year of recovery when Renault should be selling 800,000 more cars round the world and more than double its profit margin to 6 per cent. The plan hinges on the launch of 26 models between now and 2009. All these are being designed and developed at the centre where the suicides have occurred.

Renault and its chief executive have expressed deep concern over the latest tragic events. How they handle this delicate situation, balancing the company’s competitive needs with the morale and welfare of its employees – in this case engineers and highly qualified technicians – could prove a test case not just for Renault but for other multinationals.

Armani’s puzzle

Giorgio Armani continues to infuriate the world of luxury and high fashion by maintaining the suspense over his plans. For years the industry has been asking: “Will he, won’t he sell?”

This week, the 72-year-old Italian fashion icon – one the last big independents in a heavily consolidated luxury sector – revived speculation that he had finally decided to sell his empire, but said the next day that he had absolutely no intention of doing so.

Mr Armani has no direct heirs, although two nieces and a nephew work in his group, which is valued at about €5bn and employs 5,000 people in 350 stores round the world. A few years ago, the designer considered joining Bernard Arnault’s LVMH luxury group. But he preferred to remain independent.

Mr Arnault would still like to get his hands on another prestigious brand such as Armani. So would his arch French rival PPR. This could provoke a protective reaction from L’Oréal, the hair care and beauty products multinational keen to expand its existing relationship with Armani in cosmetics and perfume.

Indeed, Jean-Paul Agon, L’Oreal’s new chief executive, said this week that he had big ambitions for his company’s Armani-licensed cosmetics brand, which could grow into a €1bn a year sales business.

At some stage, Mr Armani will have to decide. A firm decision is likely to come sooner than later. His more cynical friends say there is one thing he likes even more than fashion – money.

Franco-German dogfights

The chances of Jacques Chirac, the French president, and Angela Merkel, German chancellor, making any headway at their meeting near Berlin tomorrow to resolve the deadlock over Airbus look pretty slim. There will, of course, be fine words spoken but the reality is that as long as the countries cannot trust each other, there is little hope of progress.

If anything, relations between the two – for all the so-called Franco-German relationship – have never been so bad. Worse, the Germans are, understandably perhaps, showing every intention of adopting the same protectionist approach as the French.

The Berlin government never swallowed the way the French engineered the Sanofi-Aventis drug merger to create a French pharmaceutical champion. It was furious about the way Paris erected every possible barrier to block Siemens taking over Alstom. And it was not too pleased to see the way Euronext fell to the New York Stock Exchange rather than the Deutsche Börse. The list could go on.

The problem at Airbus is that since DaimlerChrysler took charge of the country’s aerospace sector, the Germans, have sought to move into the cockpit of a European enterprise that the French consider essentially French.

For a long time the French did a great job of running Airbus. Then during the past few years they lost the plot and allowed the Germans to flex their muscles. Somehow and somewhere both sides will now have to give ground if they are serious about the future of Airbus. paul.betts@ft.com

Nintendo’s electric dream

From the breathless bidding on Ebay to the long snaking queues outside Tokyo electronic stores, Nintendo’s Wii still seems every bit as desirable as it was when first launched. The only people more excited than the gamers are the analysts.

“Sharing the Wii dream” gushed Merrill Lynch in a recent note to investors “. . . take-off into the Galaxy” predicted a Macquarie report on Nintendo a few days later. CLSA is initiating coverage on the stock today, leaving scope for yet more hyperbole.

Beneath the mouth-watering forecasts, though, Nintendo could be on the brink of something more substantial than booming sales of its own console: it could be ushering in a long-awaited new “golden age” of gaming.

The debate centres on Wii’s innovative control mechanism, which currently comprises two smallish motion-sensitive batons. It is an attractive gimmick and it may provide momentary fun pretending to play tennis in the sitting room but how long can it really last?

The answer lies not with Nintendo but with the independent software houses that make games for the Wii and its rivals. Where previously Nintendo failed – to its great cost – to reach out to the third party producers, it is now geared to embrace them.

From the game maker’s point of view, the Wii controller is a beacon of hope: not only is it generally cheaper to develop games for the Wii than Sony’s PlayStation3, but the whole control system presents an attractive playground for new gaming concepts. With lively imagination on the part of the software houses, the controller could simulate everything from a shotgun to an egg-whisk.

Whatever they say, games makers are secretly bored stiff making endless improved iterations of existing staples like Ridge Racer 7 and Virtua Fighter 5. Unlike the PS3, the Wii could give games makers a chance to suck in new air, worry less about graphics, and let creative juices flow once more. leo.lewis@ft.com

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