More Job Cuts Urged for France And Germany --- McKinsey Suggests Moves Are Needed If Industries Are to Boost Efficiency
PARIS -- The recent uproar over a Renault SA plant closing in Belgium may be only the beginning.</br></br>Thousands more jobs may have to be cut if such industries as autos, telecommunications and banking are to become as efficient in France and Germany as they are in the U.S. and Japan, according to an analysis of Europe's two largest economies.</br></br>The McKinsey & Co. review suggests that government regulations in France and Germany have slowed economic growth, increased unemployment and have often backfired -- failing to create even the social benefits regulators intended.</br></br>To an extent, the report states the obvious: High minimum wages, state regulations and stunted capital markets have retarded growth rates on both sides of the Rhine. The report also suggests that in some cases, worse things are yet to come.</br></br>The auto sector, it says, is suffering because French and German barriers on the number of Japanese cars imported into their domestic markets have delayed necessary restructuring.