Helsinki Congress of the International Economic History Association, 21-25 August 2006: Session 93 Equipment goods and mass brands American business spreading modernity into France? Strategies

C. Tactical alliances between American and French companies?
The American corporations used all varieties of partnerships in their ventures into France. The main objective was to reduce the costs of entering into the market by using, as far as possible, the networks already set up by local companies.
a. Strong partnerships for the franchisees
Some American companies had now and then created joint ventures just as Xerox had done in the United Kingdom with Rank to form Rank Xerox and in Japan with Fuji to create Fuji Xerox. Such associations made it easier to understand the local mentality and the prevailing corporate culture. The construction equipment manufacturer Caterpillar preferred to use the services of a specialized distributor like Bergerat-Monnoyeur which stocked and stored its products – with success it would seem, as Bergerat’s turnover surpassed that of its competitor Allis-Chalmers in 1963 (267 million francs against 163 million)¹⁶⁵. The French company Fenwick specialized in representing American brands. It aimed at being an import and “commission” powerhouse. Not content with the licenses already obtained before the war (for the Yale brand of goods handling equipment), it added several other licenses for machine tools, outboard motors and even for helicopters and planes¹⁶⁶. Sometimes, its own brand seemed to overshadow the name of the company whose license it held, and it so happened that “a Fenwick” came to designate a material handling machine, though the machine was built under an American license. When Du Pont de Nemours came into France in 1959, it depended mainly on the services of a commercial agency, the Société d’exploitation des produits pour les industries chimiques (Seppic), a subsidiary of a British firm. The W.R. Grace group created W.R. Grace France in 1962 to sell products imported from the United States¹⁶⁷.
Post 1945, the outstanding example was Coca-Cola. Its strategy in France followed the same pattern as in the rest of the world: it contented itself with the supply of the concentrate and sharing its technological and commercial savvy with the “bottlers” which were its brand dealers, that is, they not only manufactured the product, but also looked to its commercialization¹⁶⁸. Following the example of Société française des breuvages naturels which was founded in 1933, the Société parisienne de boissons gazeuses took up the dealership of Coca-Cola in the Île-de-France region from 1949 to 1989. It installed a large factory at Clamart in 1967 and one more at Grigny in 1985. It had several sister concerns such as the Société provençale concessionnaire de boissons gazeuses which was created by the Société nouvelle des glacières de Paris in 1949 to make and sell Coca-Cola (a spanking new factory was installed near Marseille in1970). In a similar fashion, Nabisco-Belin tied up with the wholesaler Baud for distributing its biscuits in the Paris region. But in 1969 it bought over the provincial dealerships.
A typical example of a brand franchisee was the arrival of Manpower in France via its association with a team of local directors who bolstered their own company which was already in the temping sector in France. Manpower was so successful in harmonizing itself with the French corporate culture that it was actually thought to be “Parisian”. This was because the local directors had a very good knowledge of the employment and business practices of their country, which allowed them to incorporate the concept of temping in a very short time.
b. The multiplication of ad hoc manufacturing partnerships
In the past, a number of American companies had taken to forming associations in order to bring their technology into France. The American advantage in electrical appliances resulted in the signing of an agreement, in 1949, between Sylvania Electric Products¹⁶⁹ and Visseaux, the French maker of Zenith lamps¹⁷⁰, which thus gained from a technology transfer to increase its output by 50 per cent in the face of its chief competitor, a subsidiary of Philips. Similarly, the Fotor lamp company (Grammont) joined hands with Rca in 1947 and obtained its licence for the manufacture of radio tubes; in 1971, Rca sold its color television tube license to the French group of Thomson-Brandt¹⁷¹. We know that starting from 1929, Westinghouse had given a large number of licenses to the Schneider group via Schneider-Westinghouse, their joint subsidiary which dealt with electronic equipment and which subsequently became Jeumont-Schneider in 1931. But there were other companies too which were granted Westinghouse patents, such as Merlin-Gerin¹⁷² which in the 1970s, merged with the Schneider group. The washing machine revolution set off a spate patent transfers due to the fact that French households wanted to program their own wash cycles and were reluctant to use the American automatic machines. Thus, French manufacturers retained their industrial and commercial leadership in this field, albeit with the acquisition of a number of us patents for the electromechanical components¹⁷³. One of them also bought the license to use the Bendix brand name.
The American innovative genius in the chemical industry too led to several notable alliances in that era. In 1950, the chemical giant Monsanto acquired a 10 per cent stake of the Société des produits chimiques Coignet and exchanged patents¹⁷⁴ as well as technological know-how. America had a stock of transferable patents which were ideally suited to the “specialty chemistry” niche which was bubbling with innovations and rich with the promise of high value addition. In 1955, Monsanto not only bought 9.5 per cent of Coignet but also of a subsidiary which was jointly owned by the glass-maker Monsanto-Boussois. Dow Corning had meanwhile joined hands with another glass-maker, Saint Gobain in April 1945 to form the Société industrielle des silicones et des produits chimiques du silicium (in a 50-50 partnership) ¹⁷⁵. During the years 1948 to 1958, Rhône-Poulenc tied up with the American Geco for the manufacture of silicon products, before obtaining several patents in 1952 for its factory at Saint-Fons-Carrières¹⁷⁶. Though the giant Du Pont de Nemours refused to enter France directly, contenting itself with its four European factories¹⁷⁷, it penetrated France with the aid of ad hoc specialized partnerships. Though Du Pont’s subsidiary was established in 1959, it manufactured and sold its own brand of weed-killers; in 1969, it created Dekachimie¹⁷⁸, a joint subsidiary with Kuhlmann; similarly, it also created several other partnerships for the utilization of its patents, for floor covering (with agreements woven with carpet makers in 1971) and for synthetic textile fibers, especially Dacron, at the end of the 1960s for which it advertised by associating this brand with its own name¹⁷⁹. “The Schappe Orlon fiber for your hose and your stockings”¹⁸⁰ and “Bally places the future at your feet with Corfam”¹⁸¹ announced two brands working under Du Pont patents. The company had to rev up its research efforts to compensate for the fact that the Nylon patents went public in 1964 (managed in France, as we have already seen, by Rhône-Poulenc). Elsewhere in the same sector, Corning Glass entered into a partnership with Saint Gobain to form Sovirel (held 52 and 48 per cent respectively) whose 4,000 employees were engaged in the manufacture of Pyrex vessels, optical glass and television tubes and screens in 1968; in August 1969, Saint Gobain sold half its share to the Americans. In the early 1960s, another French industrial leader, Pechiney-Saint-Gobain joined the Phillips Petroleum group in its world-wide offensive – they came together to build chemical factories in the United States¹⁸² and also two in Europe (at Anvers and at Basse-Seine, at Gonfreville-L’Orcher¹⁸³) for the manufacture of the base material required in the production of high density polyethylene (made at the Pechiney-Saint-Gobain,and later by Rhône-Poulenc, when it took over this company, in their own factories).
The third sector which was ready for such patent transfers was the field of mechanics. Here too the United States made use of its superiority to help bring about the second industrial revolution. In 1940, the French materials handling equipment manufacturer Fenwick, which had already made its name selling American products, acquired the license to manufacture forklift trucks¹⁸⁴. In 1955, Clark Equipment bought over 39 per cent of the Ateliers de Strasbourg and prevailed upon Richier to manufacture materials handling equipment under license. In 1950 Dana gave the French Glaenzer-Spicer a general license to use its Spicer patents (automobile parts) in France in exchange for a seventh of its capital (135,000 dollars). In 1946 Fruehauf first established a subsidiary to import, and later, manufacture trailers and semi-trailers. Its share of the capital, which stood at first at 30 percent, rose to 62 per cent in 1953 in exchange for an injection of 250,000 dollars in the framework of the Marshall Plan¹⁸⁵. The tire manufacturer Goodrich was happy with its 25 per cent stake in the French company Colombes (till 1965), as that gave it access to a fifth of the entire French market.

Later, in the 1970s, Cfao set up a technology trading network by acquiring companies which held American licenses. In the Southeast for example, the French companies Boulogne and Huard-Forair retained the licenses for General Motors motors and Ingersoll compressors and perforators¹⁸⁶. In the north, Penven supplied 26 generator plants with industrial motors and spare parts from General Motors. These three companies and two others from the West (Gecimer and Camin) dealt with the entire range of Detroit-Diesel-Allison engines (part of the General Motors group) – each in its own region. The underlying strategy was common to many other American groups: “The 1950s and 1960s saw the development of a worldwide distribution network of independent, authorized distributors and dealers to provide parts and service to the markets it was serving.”¹⁸⁷

Metal works was the fourth sector which saw many such transfers. Some major technological inputs went into metallurgy for the manufacture of high temperature steel and for steel rolling¹⁸⁸. A number of agreements were signed at the turn of the 1960s like the one which united Continental Can with J.J. Carnaud & Forges of Basse-Indre, the leader in packaging, or the one between American Can and Ferembal¹⁸⁹. This collaborative process spread so steadily and discreetly that it is difficult to auscultate its pulse or measure its effects with any great certainty. Thus, in a branch which did not show any outer signs of the revolution taking place, Balsan of Châteauroux, a major manufacturer of carpets and broadloom, signed an agreement with the American company World Carpets in October 1966. In 1970, a special agreement linked US Steel with Aciéries de Paris-Outreau and the resulting financial aid in the installation of a new blast furnace in the factory gave it access to one fifth of all ferro-manganese produced for its own use in Europe.
The fifth key sector which saw many such partnerships was the aeronautic industry. The Anglo-American domination in this field justified ad hoc partnerships though France continued to forge ahead on its own developmental program. In 1959, the public sector company Snecma bought the license for the TF 30 turbojet engine from the American Pratt & Whitney in exchange for 11 per cent of its capital. This landmark agreement led to the deployment of a whole range of aircraft engines (TF 104, TF 106, TF 306) which, bit by bit, began to undergo a process of “Frenchification”. Nevertheless, in 1965 this agreement was suddenly annulled, without any clear reasons being given. It could have been something to do with the agreement signed between Rolls Royce and two French companies¹⁹⁰ in 1964-1965, or perhaps it formed part of a policy aimed at improving Anglo-French cooperation, and being less dependent on the United States.
As for the consumer goods industry, in 1960, the stationer Darblay joined hands with Kimberly-Clark, a giant in the American paper industry, and gave it access to its industrial site at Corbeil-Essonnes for the manufacture of the Sopalin and Kleenex range of products. Later, it did the same with its site at Rouen-Villey-Saint-Etienne in Normandy. Cargill’s dominance in trade and its influence in the agri-food industry explains why the two French oilseeds giants Lesieur¹⁹¹ and Unipol joined it to form a large soya-seed crushing factory at Saint Nazaire in 1968. In the publishing sector, Mac Graw Hill, which concentrated mainly on management and the economy (it published Business Week), associated itself with the Servan-Schreiber group in 1967 to form Technic Union and launch the monthly magazine L’Expansion which specialized in diffusing information regarding the business world. It is almost impossible to recreate a completely accurate picture of all the ad hoc partnerships and our analysis cannot but be fragmentary. Still, one can say that the American presence was stronger than one would have thought, thanks to the network of French subsidiaries owned by American brands. In all these cases, American technology had a far greater say than American capital because in general, the American companies were content to simply offer their patents and to seal technological assistance partnerships. The modest investments of capital were only as part payment to these latter for sharing in the profits that they made.
D. The consolidation of American industries 
In the beginning, the American pioneers had chosen to make direct investments in order to make the most of their technological capital. The post-war period saw some new kinds of investments: for example, in 1950, Saint-Regis Paper signed a contract with Drouet for the manufacture of synthetic resins. In 1956, the Swiss subsidiary of American Can established its own subsidiary Turboplast France (plastic tubes and flat flat boxes) by first buying out a factory owned by some other company and later, setting up a second factory at Sainte-Menehoulde (in Marne) ¹⁹² in 1963. As France began to figure more prominently in the European strategy of American groups, the 1960s and 1970s saw an increasing number of these American conglomerates setting up industries in France. And in spite of a few disinvestments, as in the case of Allis Chalmers¹⁹³, France’s allure remained strong. “WOR-THING-TON… an American technology which is today pronounced the way you would”¹⁹⁴ proclaimed an American firm which wanted to declare that henceforth, it manufactured its compressors in its factory at Bourget (in the suburbs north of Paris): “All these French products benefit from Worthington technology.” The transfer of technology now entered a new phase with the implantation of production units in France itself. But these factories came in direct competition with their counterparts in other European countries which were also in the running as America’s bridgeheads for penetrating the Common Market or the West European free trade zone. While many factories were installed in the uk for reasons of language, managerial style and (in those days) the aeronautic proximity, a number of corporations balanced it by choosing countries in continental Europe.
A few regions of France were found to be better suited than others: neatly tucked into the very heart of the European Rhineland and blessed with quality manpower, Alsace very quickly attracted a number of factories like the one owned by Timken (ball bearings in Colmar in the 1960s) whose advertisements began appearing in L’Expansion from March 1969. In 1970, in spite of its two factories in Germany and the one in Belgium, Clark Equipment expanded its factory at Strasbourg to manufacture its Michigan range of equipment in addition to forklift trucks. The lure of the region around Paris was due to the size of the regional market and the fine industrial tradition of its suburbs, which were well stocked with equipment suppliers and consequently, potential customers. The North had a history of industrial know-how, which explains Massey-Ferguson’s factory near Lille. Finally, the foreign companies also joined the process of decentralization outside the Paris area, which formed part of the national economic planning: Consequently, the “large Parisian Basin” (about 200 km from Paris) attracted a large number of factories, including the one owned by Massey-Ferguson at Beauvais and Nabisco-Belin’s plant at Ris-Orangis in 1973. In the south, the forced and precipitous departure of Nato based American troops freed some space at Châteauroux which was occupied most notably by an Alcoa factory (finished aluminum products – one of the 26 owned by the group¹⁹⁵). The large Paris region was especially attractive to the pharmaceutical firms which had just begun a discreet entry into France¹⁹⁶.

Companies with American capial in 1963: Drugs
Johnson & Johnson	Ethnor, filiale avec Midy
American Home Products	Société chimique Wyeth (avec Clyn-Byla) Laboratoires Wyeth-Byla
Note de Jean Rivoire, Sociétés à participation américaine en 1963, Archives historiques du Crédit lyonnais, daf 02067-1.

a. The assault of the American chemical industry
The American offensive in the chemical sector followed the way of partnerships, as we saw earlier. The obvious American advantage in the field of specialized chemistry (particularly abrasives) led to the installation of a number of new factories in the 1950s and 60s, especially in the petrochemical industry. Hot on the heels of these incursions came other American industrialists who found a whole new market opening up with the coming of the green revolution in Europe. Thus, Monsanto entered the French pesticide market¹⁹⁷ in 1960, while Ralston-Purina bought over Duquesne, the French leader in cattle-feed in 1968.

Companies with American capital^198 in 1963: Chemicals
United Carbon France	Carbone black in Port-Jérôme
Godfrex Cabot	Carbone black in Berre
Monsanto	Polystyrene in Wingles (Pas-de-Calais)
Dow Corning	Société industrielle de silicones in Saint-Fons (Rhône)
Dow Chemical	Common subsidiary with Pechiney : polystyrene in Ribécourt (Oise)
3M	Minnesota de France (ex-Abrasifs Durex), in Gennevilliers, Beauchamp and La Courneuve
Norton	Abrasifs à Conflans-Saint-Honorine Compagnie des meules Norton
Carborundum	Abrasives in (Les Abrasifs du Sud-Ouest, in Beyrède, Hautes-Pyrénées)(with Pechiney)
Borden	Glues and synthetic resins, in Fécamp
Reichhold	Glues and synthetic resins, in Bezons and Niort
Pittsburg Plate Glass	Corona paintings and Huileries de Valenciennes
Eastman Kodak	Photography in Vincennes, Sevran and Chalon-sur-Saône

Some chronological clues about American investments in chemicals and specialised materials
1949	Corhart Refractories (Corning Glass) (subsidiary L’Electroréfractaire): investment into a new oven
1949	W.R. Grace : 50 % de Darex (fabrication d’emballages plastiques, à Épernon)
1949-1950	Heyden Chemical : filiale Société industrielle pour la fabrication des antibiotiques Sika : création d’une usine pour fabriquer de la streptomycine à La Plaine-Saint-Denis)^199
1950	Monsanto : aide et participation dans Produits chimiques Coignet
1951	3M : usine à Beauchamp pour de la papeterie de bureau
mi-1950s	Bourne Chemical : filiale Produits chimiques Bourne (minium)
mi-1950s	Glaenzer-Spicer associé à Dana^200
mi-1950s	Dow Corning associé à Saint-Gobain : Industrielle de silicones et des produits chimiques du silicium
mi-1950s	Sewey & Almy Chemicals : filiale Darex
mi-1950s	Deux usines Eternit
1956	American Can Company achète (indirectement) une usine à Vienne-le-Château (Marne) (tubes et emballage en plastique)
1959	Du Pont de Nemours France : fait fabriquer à façon ; filiale commune en 1961 avec Kühlmann.
?	Corning Glass et Saint-Gobain associés dans Sovirel (verres spécialisés)

b. American power in the engineering industry
The Americans’ clear superiority in the manufacture of motors explains the dominance of American manufacturers in the agriculture and farm equipment industry of Europe. Two of them had already established bridgeheads in France as early as 1951. The Massey-Harris-Ferguson company, a subsidiary of the Canadian Massey-Harris group²⁰¹ had opened a plant which produced its light tractor Pony²⁰² (with a capacity of 4,000 units per year). In 1950, International Harvester – which in 1948, had acquired a controlling stake in the Compagnie internationale de machines agricoles (Cima) – entrusted Cima-Wallut with the manufacture of three tractors²⁰³ in a factory at Saint-Dizier in the east of the country²⁰⁴. Almost immediately, these two enterprises increased their output to 11 500 units in 1951, a figure which accounted for 30 per cent of the 27,000 tractors manufactured in France in 1950. The Cima-International Harvester France group employed some 9,000 people and owned three factories, two older ones (one at Croix-Wasquehal which manufactured agricultural machinery and the other at Montataire for farming material) and a third, more recent installation, which had 2,000 employees. It produced a fifth of all the farming material produced in France and made 29,000 of the 80,000 tractors manufactured in the country in 1956, as against the 17,000 made by its rival Massey-Harris-Ferguson²⁰⁵. But this latter had chosen a different approach – it preferred to design and distribute the material, while leaving the actual production to subcontracting industries (mainly Standard Hotchkiss). It also imported a large number of machines and parts.
Just as the manufacturers of agricultural equipment prospered due to the mechanisation leap taken by the French agricultural sector, the makers of construction equipment also benefited from the explosive growth in the French roadworks sector. As would be expected, an American group was there to grab a substantial part of this new market: The Allis Chalmers group (manufacturers of tractors, bulldozers, graders, loaders, angledozers, etc.) which had a presence in France since 1950, set up a factory at Guerche-sur-l’Aubois (Cher) and, by the beginning of the 1960s, had risen to the second spot in the market with a turnover of 163 million francs²⁰⁶ in 1963.
In the meantime, similar, incisive incursions were made in the automobile sector. In 1959, the powerful Bendix Corporation of America acquired full control of Ducellier, a family corporation in which it already had a 41 per cent stake since 1931, but whose management it had to share with other French investors. Now, it was turned into a powerful tool for the insertion of the Lockheed and Bendix brands in France. At the same time, the lift manufacturer Otis²⁰⁷ (of the Itt group) also thought of making the most of the modernization drive which was sweeping through the French building sector. In 1962 it bought a controlling interest in Ascinter, which was a conglomerate of thirteen family-owned corporations. Ascinter-Otis bought over a factory which had been founded in 1961 and soon established itself as the leader with a third of all installed lifts in 1968 – well ahead of Westinghouse-Artis and the French company Schindler. Elsewhere, but still in the metallurgical field, the increasing popularity of Gillette necessitated the implantation of a large factory at Annecy in 1952, a move which was facilitated by the government grants and subsidies aiding the process of decentralization away from Paris.

Events about companies with American capital in the 1950s-1960s : Mechanics
1950s	Allis Chalmers (engineering machines) had a plant at La Guerche-sur-l’Aubois
1951	International Harvester : factory of tractors at Saint-Dizier
1951	Massey-Harris : created a factory of tractors
1952	Gillette transferred its plant for blades from Paris to Annecy (Haute-Savoie)
Beginnings of 1950s	American licenses for Fenwick
1959	Purchase of Ducellier by Bendix (car equipment)
1962	Otis (Itt) purchased Ascinter (lifts)

The technological and industrial superiority of the Americans in the 1950s and 1960s, before the advent of the Japanese, is even more evident in the machine tools industry²⁰⁸ and in several other kinds of specialized equipment. It becomes all the more clear when we consider the extent of the American involvement and the number of partnerships and subsidiaries held by American corporations in this sector at the turn of the 1960s, in spite of the fact that the Germans could export so much more easily their own products – despite the customs duties.

Companies with American equity^209 in the industry of equipment goods using metals in 1963
International Harvester France	Saint-Dizier
Compagnie française John Deere	Plant for tractors in Orléans
Allis-Chalmers	Établissements de construction mécanique de Vandoeuvre (Aube) : tractors
Case	Société française de matériel agricole et industriel (à Vierzon)
Fruehauf France	Trucks trailers in Auxerre and Viry-Châtillon
Budd	Half-equity in Carel-Fouché (railway equipment)
HK Porter	- HK Porter France (ex-Aciéries et ateliers et constructions de Marpent) : railway equipment in Maubeuge - Sahe (Société d’applications hydrauliques et électriques), à Puteaux, Nanterre et Haillicourt (Pas-de-Calais)
American Radiator & Standard	Ideal Standard, à Autun
Crane	Crane France (ex-Cicra et Etablissements Jules Coccard), industrial plumbing fixtures
Worthington	Compressors (Le Bourget et Condé-sur-Noireau)
Ingersoll Rand	Compressors
Borg Warner	Le Froid industriel (common subsidiary with Brissot in Nantes
Bliss	Machine-tools in Saint-Ouen
Sundstrand	Société parisienne de machines-outils
Landis	Landis-Gendron, machine-tools in Villeurbanne
Timken Roller Bearing	Ball bearings in Colmar and Asnières
United Shoe Machinery	Machines for the shoe industry, in Fougères (Britanny)