France fears 'economic war' after Renault spy scandal

6th January 2011, Comments 0 comments

France said Thursday it was the target of "economic war" after an industrial espionage scandal at Renault involving electric car technology, the auto industry's big hope for the future.

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

They forecast that electric cars will make up 10 percent of the market by 2020 and are pumping 200 million euros a year in their electric programmes, while other major carmakers are also investing heavily in the sector.

"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.

The firm's senior vice president Christian Husson told AFP 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, in which the French state has a 15-percent share, has not said who the alleged spying might benefit.

Late Thursday, Renault management said that it would file a complaint over the case.

"We are looking into all legal options which will inevitably lead us to file a complaint," Husson told AFP. "At this stage, Renault does not wish to comment further."

Sources said those suspended had all headed electric vehicles projects and one was a member of the company's management committee, a 30-strong panel of top managers headed by chief executive Carlos Ghosn.

The suspensions are the latest in a series of industrial espionage shocks to hit France's strategically important auto sector, which employs 10 percent of the entire French workforce.

Tyre manufacturer Michelin and auto parts maker Valeo have also been targets of spying.

Industry Minister Besson said he wanted firms which receive state aid for research and development to boost efforts to protect themselves against espionage.

Secretary of State for Foreign Trade Pierre Lellouche, meanwhile, called for a law to protect companies' industrial secrets as a matter of urgency.

The car industry, 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 really keep secrets, there are so many people involved and so many documents.

"Today you have email, you have the Internet, you have mobile cameras and it's 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."

Electric car technology is a particularly prized asset at Renault.

It plans to launch electric versions of its Fluence model and its Kangoo Express in mid-2011, and its smaller Twizy and Zoe models in late 2011 and 2012.

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.

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.

© 2011 AFP

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