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All industry should be producing military factories. The default French infantry division template works, though ideally it
would also have support engineers and anti-tank. A good military factory allocation is 8-10 factories to infantry equipment, 4 to support equipment, then 2-3 on artillery and 4-5 on anti-tank. After those are covered, military factories should be devoted to fighters and CAS.
In early or mid 1938 industry should be turned to construction of land forts along the Italian and Belgian borders. Land forts cost more to produce the higher the level they are, but the focuses to extend the Maginot line add 2 levels to the Italian and Belgian borders regardless of the current fort level there, so it is more efficient to first construct 3 levels of forts on each state before completing the focuses.