🔒 Winds of change in Parisian capitalism as foreign CEO’s take over French business: Lionel Laurent

In the heart of Parisian capitalism, winds of change are stirring. As traditional titans falter under the weight of debt, a new breed of leaders emerges, their origins far from the City of Light. With CEOs of diverse nationalities steering France’s top firms, a fresh global perspective revitalizes historic brands like Air France-KLM and Renault. Yet, challenges persist, from gender disparities to a resistance to tech innovation. Will this be the dawn of a truly modern French revolution, or merely a fleeting shift in the tides of tradition?

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By Lionel Laurent ___STEADY_PAYWALL___

Is French capitalism stuck in a rut? Higher interest rates have battered the high-debt empires of Altice SA billionaire Patrick Drahi and retail tycoon Jean-Charles Naouri. The ever-present state, after nationalizing utility Electricite de France SA, has taken a golden share in struggling IT firm Atos SE. The likes of Bernard Arnault’s LVMH still straddle the globe, but billionaire wealth looks increasingly tied to inheritance than to entrepreneurial chutzpah.

So much for the revolution promised by President Emmanuel Macron back in 2017 — an admittedly different time before pandemic and war. But look a little closer and there are signs the cozy Parisian business world is getting an overdue shakeup, as a raft of new chief executives and managers knock at the boardroom door.

Around half of France’s top 40 blue-chip firms have replaced their CEO since 2019, heralding the rise of a more international clutch of leaders in a market that’s usually fared better at exporting top talent to London banks or American biotechs than importing it. Historic French brands Air France-KLM, Renault SA, and Stellantis NV’s Peugeot are today run by non-French nationals who are doing a good job: Air France reported record profit last year under Canadian Ben Smith, a far cry from the days when angry workers would physically tear the shirts off executives’ backs. Italian Luca De Meo took the reins at Renault when it was losing millions of euros a day; it’s now back in the black with a market value surpassing that of partner Nissan Motor Co. for the first time in years.

Foreign CEOs still make up only 18% of top French firms — below the global average of 25%, according to Heidrick & Struggles data — but they’re proving capable of delivering “Made in France” in a de-globalizing world. De Meo’s Gallic predecessors at Renault seemed less keen to indulge in the past glories of “Brand France”; but after relaunching the Fiat 500 to roaring success, the Italian is set to do the same with an electric version of the classic R5 that includes a wicker basket for baguettes. De Meo is also fully in tune with the French reindustrialization championed by Macron — his Renault is tied to the industrial heartlands of northern France, where new battery gigafactories are reversing decades of outsourcing manufacturing. 

Other changes are happening. Macron’s closure of the École Nationale d’Administration coincides with a dwindling share of enarques running French firms, according to consultant Vincent de la Vaissiere, and shows how executive experience is trumping a historic tendency toward elitism at a time of fragile supply chains and overlapping crises. One example is Air France’s Smith: Cut from a very different cloth to his technocratic predecessors, the non-French speaker is “the first boss we’ve had to really roll his sleeves up,” one pilot tells me, praising his ability to settle union disputes. More leaders are being promoted from within than parachuted in, even at intensely political firms like plane maker Airbus SE, which announced record orders last year.

And in a country in demographic decline, younger entrepreneurial outsiders are seizing opportunity in the crisis facing debt-laden corporate champions fallen on hard times. Onepoint SAS founder David Layani, who left school at 16 and built an IT firm with revenue at almost €500 million, has built up a stake in Atos amid its crash and has his eye on control after seeing off an early tilt by billionaire Czech suitor Daniel Kretinsky. Another example is Moez-Alexandre Zouari, a retail entrepreneur with Tunisian roots, who tried to mount a rescue of Naouri’s grocery chain Casino Guichard Perrachon SA.

The wheels of change do turn slowly, though: This isn’t quite the modern, diverse turn one might have expected from the early years of “Generation Macron.” Yes, there are more women CEOs in France than there used to be — Orange SA’s Christel Heydemann, Veolia Environnement SA’s Estelle Brachlianoff and Engie SA’s Catherine MacGregor all took the reins in the past couple of years — but they have a lower share overall than in the US or UK. Signs of a glass ceiling for some rising stars are still there: Rami Baitieh, a top executive at retailer Carrefour SA, stunned the corporate world when he left for the UK to lead an overhaul at WM Morrison Supermarkets Ltd. 

All of which highlights two likely catalysts for future change: The arrival of a new generation at billionaire-run companies like LVMH and the brash tech startups riding a potentially disruptive artificial-intelligence wave. If the heirs of tomorrow help spread accumulated wealth by investing in promising unicorns like Mistral AI, that could deliver the next phase of the business world’s very un-French revolution. More change would be a good thing: It would be a shame if Paris becomes dominated by leaders who, like the Bourbons, learn nothing and forget nothing.

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