“I think it’s very bad for the state to meddle in the management of private companies. It usually leads to disaster”. It’s one of the strongest comments that LVMH boss Bernard Arnault made to senators during a much-anticipated parliamentary hearing, held on Wednesday, May 21. French media reported of a tense, confrontational discussion where there was no shortage of mutual exchanges of accusations. Then they discussed LVMH’s business, layoffs, and tariffs.
The Senate hearing
The beginning of the hearing wasn’t encouraging. Arnault said he was “a bit shocked” by the headline on the front page of L’Humanité newspaper, saying that luxury was cutting jobs. In the crosshairs of the French billionaire, who disputed the headline, is Fabien Gay, editor of the paper and speaker of the committee in the French Senate, who retorted just as sharply.
Arnault listed the investments made in France, the tax contribution (4 billion euros from LVMH’s 2023 budget), the number of French employees (40,000), and even the decisive contribution to the renovation of Notre-Dame in Paris. But Gay brings the discussion to the issue of tax optimization. Arnault objects, “Should we close our subsidiary in Panama to avoid tax optimization?” Then, he reiterated how LVMH is probably the most patriotic group of all those that make up the CAC 40 and “the one that pays by far the most taxes in France”, reports Le Figaro.
The issue of layoffs
Arnault was then called upon to explain the planned layoffs in LVMH’s liquor division. And Arnault retorts again, “We have a moral responsibility to not lay people off, but we cannot be forced to keep the same number of jobs, when the economic situation is difficult”. And the edgiest part came soon after, when LVMH’s number one was asked what he thought of Emmanuel Macron’s call for French companies to suspend their investments in the U.S. after the announcement of tariffs. Arnault replied that he didn’t want to “stop the expansion and establishment” of LVMH overseas, which, by the way, “already existed”. He then sharpened his sword: “I think it’s very bad for the state to meddle in the management of private companies. It usually leads to disaster”.
The response to the duties
Arnault wasn’t satisfied, and moved on to criticize Europe, saying that negotiations with Washington on duties have gotten off to a “bad start”, the Financial Times reports. “Negotiations must be conducted constructively … and then with mutual concessions. You have seen what the British did, as they negotiated very well. I hope I can convince Europe, with my limited resources and contacts, to take an equally constructive position. If we were to threaten Donald Trump, we would get the opposite result”, Arnault said.
Photo from Shutterstock
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