Big Cisco bet on France offers relief from Air France fiasco

Reuters News
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Posted: Oct 08, 2015 11:30 AM

PARIS (Reuters) - Still reeling from front page images of shirtless Air France executives fleeing angry workers, the French government got a welcome boost on Thursday for its campaign to attract foreign investment from U.S. tech group Cisco.

Enthusing about how France would become Europe's digital leader, CEO John Chambers said the network infrastructure builder would double a 100 million euro ($113 million) investment in the country announced only months ago.

Flanked by Economy Minister Emmanuel Macron, Chambers told journalists during a visit to the company's French headquarters that he was in no way deterred by footage of Air France executives hounded from failed job cut talks with unions, their shirts torn from their backs.

French leaders from President Francois Hollande on down the ranks warned earlier in the week that the incident risked scaring off the investors they are trying desperately to woo, by presenting a France mired in social conflict and resistant to change.

Gushing about the governments openness towards investors and France's vibrant tech start-up scene, Chambers said the country could create a million jobs over three years while enjoying growth of up to three percent faster than peers.

"What excites me most about this trip is how fast the country is changing," the Republican CEO told journalists as the Socialist minister looked on approvingly.

Tuesday's Air France incident could hardly have come at a worse time for the government, on the eve of a big push to attract venture capitalists that culminated in a reception at the prestigious Versailles palace outside Paris.

Macron, a youthful former investment banker, is working hard to drum up foreign investment and reverse the damage of a series of tax hikes targeting the wealthy that did much to boost France's image as a high-tax country.

Working in his favor is a France's generous tax credit scheme - unique among OECD countries - that allows companies to get money back from the state for research and development spending.

Acknowledging tax was a decisive factor for Cisco's investments, Chambers said: "If you really want to have engineers, you got to have an environment that rewards companies for investing in engineers and start-ups."

($1 = 0.8883 euros)

(Reporting by Leigh Thomas)