France at economic war with electric vehicles spies

The Industry Minister, Eric Besson, told French radio: ”The expression ‘economic war’, while often outrageous, is for once appropriate here”. The case illustrated ”the risks our companies face in terms of industrial espionage, and economic intelligence”, Mr Besson said.

French automaker Renault suspects that top managers suspended for alleged industrial espionage were supplying details of the company’s electric cars to China, a newspaper and officials said Friday.

The daily Le Figaro cited "several internal sources" at the company as saying that Renault and the French secret service suspect Chinese involvement in the affair.

"Suspicions are indeed leading in that direction," towards China, said Bernard Carayon, a lawmaker for President Nicolas Sarkozy’s UM party who has authored several specialist reports on economic intelligence.

A "Chinese lead" has been found in the Renault industrial espionage affair in which 3 managers have been suspended. The three are suspected of having passed on information about electric cars. According to internal sources cited by ‘Le Figaro’: "The French secret service is taking the matter very seriously and an enquiry is following up a Chinese lead."

Renault has opened the biggest industrial espionage investigation in its history. The three executives were escorted from their offices at Renault’s technical centre outside Paris on Monday. They had been under investigation for months over breaches of ”ethics”.
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They include Michel Balthazard, a senior member of the management committee for 30 years who had access to highly sensitive material about Renault’s cars of the future. Another suspended manager worked exclusively on electric cars.

The government source said French President Nicolas Sarkozy’s office had ordered the investigation. Renault, which declined to comment, is 15% owned by the French state.

"The Elysee has charged the DCRI (intelligence services) with an investigation. It is following a Chinese lead," the source said. Relations between France and China hit a low roughly two years ago when Mr. Sarkozy criticised Beijing’s policy on Tibet, prompting Chinese citizens to call for boycotts of French products.

But a recent visit by Chinese President Hu Jintao to Paris helped forge closer ties, as France seeks to secure Chinese support for its ambitious G20 agenda to explore reforms of the global monetary system.

China, where auto exhaust emissions account for around 70% of air pollution in major cities, is pushing green vehicles heavily as part of the development of its auto industry.

China’s output of electric vehicles is expected to reach 1 million units by 2020, the official Xinhua news agency said late last year.

Beijing launched a pilot programme in June to hand out rebates to electric and hybrid car buyers as its stepped up its efforts to cut emissions, and it is due to present a draft plan setting out billions of yuans of investment in the sector.

Worldwide, mass-market electric vehicle production is still in its infancy. Major carmakers including Nissan 7201., Mitsubishi and PSA Peugeot Citroen have launched electric vehicles in recent months, but the numbers on the roads remain in the thousands.

The European Union’s industry chief called on Thursday for an EU body to be set up to vet foreign investment in the bloc, and possibly block deals that aim to secure valuable technologies.

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.

France’s Industry Minister Eric Besson said Thursday the country was the target of "economic war" and called for firms that receive state aid for research and development to boost their protection against espionage. Roger Faligot, a world specialist in Chinese espionage, said Chinese intelligence is particularly interested in the auto industry and that its major car companies work closely with the secret service.