The reasons why Motorola chose France Khaldoun ANASTAS Olivier BROCHE Denis FEDERICO Gwendoline KASTLER Guerric PHELIP Morgan VAN BAREN Mastère Spécialisé Management de Grands Projets

Synopsis Motorola About the Crolles center Typical French assets Typical French drawbacks Specific reasons for Crolles2

Motorola in the World Global leader in integrated communications and embedded electronic solutions 30 bln$ TO, 110,000 employees around the world Developing different activities in telecommunications and electronics

Motorola in France In 1967 Motorola chose France to set up its first non-American factory 3,100 employees on 4 sites : Paris, Angers, Toulouse, Crolles Vehicle electronics, mobile phones, semiconductors, R&D and sales

About the Crolles Center (1/3) April 12th 2002, Motorola joins Philips (Europe n°1) and STMicroelectronics (World n°3) at Crolles Pre-existing European alliance between Philips and STMicroelectronics An alliance due to excessive R&D costs

About the Crolles Center (2/3) Technical Goal : next generation system-on-chip (SoC) product development for low-power, wireless, networking, consumer and high-speed applications Strategic Goal : World leadership of nanometric technologies for SoC 2 major goals

About the Crolles Center (3/3) Total Investment : 2.8 bln€, over the next 5 years, equally supported by all three members Largest investment on French territory of the last 10 years 1,500 direct jobs and 4,500 indirect jobs created

Typical French Assets (1/2) High Quality infrastructures High Quality telecommunication services Free and national healthcare system High Quality of life Excellent free and national education and training system

Typical French Assets (2/2) Economic and political stability Central position in Western Europe Member of the euro zone Abundant and low cost energy Exceptionally attractive environment  Exceptionally attractive environment

Typical French Drawbacks (1/2) High labor taxes High production taxes High taxes on managers’ wages Powerful French unions (Strikes,…) 35-hour week policy

Typical French Drawbacks (2/2) “French Specific” attitude Fab Closing or moving is very expensive Unfavorable stock-option policy

Specific reasons for Crolles2 (1/3) Motorola’s favorable history Necessary grouping Existing alliance between Philips and STM From our interview with Mr. Lavigne

Specific reasons for Crolles2 (2/3) French R&D assets –Brains –Research Credit Tax unique in the world –1/2 of the European R&D centers are in France From our interview with Mr. Lavigne

Specific reasons for Crolles2 (3/3) Government implications –France is the 2nd leading country for large projects –Active AFI –Crolles2 project signed in 6 days –108,000 € tax reductions and other incentives for every job created From our interview with Mr. Lavigne

Conclusions Crolles2 implantation is successful France is attractive for R&D … But : if taxes were lower, the HQ would come more easily to France  HQ + R&D = Industries