France fears 'economic war' after Renault spy scandal

6th January 2011, Comments 0 comments

France said is the target of "economic war" on Thursday after revelations of industrial espionage at auto giant Renault, focused on groundbreaking technology for electric cars.

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

"The expression 'economic war', while sometimes outrageous, for once is appropriate," said Industry 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 Thursday that its "strategic, intellectual and technological assets" had been targeted.

Other top car makers across the world are also in on the act and their electric vehicles will be on display at this month's Detroit Motor Show.

Renault's French competitor Citroen is making the C-Zero and Peugeot the iON. Tata of India is preparing to launch the Vista EV, while Mercedes-Benz of Germany has an electric smart car, the Fortwo ED, and in Japan Mitsubishi has the iMiEV and Toyota the Prius Plug-in.

Renault senior vice president Christian Husson said that the suspected espionage "was a very serious incident concerning persons in a particularly strategic position in the company."

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.

Renault has not said who the alleged spying might benefit.

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

The industry minister said on Thursday 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, defence 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.

The German bank NordLB's auto analyst Frank Schwope said that companies today "can't keep secrets really, there are so many people involved and so many documents."

"Today you have email, you have the internet, you have mobile cameras and its much easier to steal information than before," he said, adding however that "you can always get secrets but the question is, is it good information."

France itself is the top offender when it comes to industrial espionage, and is even worse than China and Russia, according to a leaked US 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 25,000 euros (34,000 dollars) and its Kangoo Express for about 20,000 euros in mid-2011, and its smaller Twizy and Zoe models in late 2011 and 2012.

It forecasts that electric cars will make up 10 percent of the market by 2020. Along with its Japanese partner Nissan, it is investing 200 million euros a year in the programme.

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.

© 2011 AFP

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