Making the Market

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"Whether Britain joins the Common Market or not," predicted one British businessman last week, "there will soon be no more difference between the English and the French than there is between the English and the Scots." Bringing that day ever closer is a new class of European business leaders, who, with aggressiveness and vision, are shaping a new Europe, where national tastes and economic expectations are increasingly giving way to a single European pattern. They have made Mercedes the new status symbol in Italy, cheap Italian refrigerators the rage among French housewives, and Dutch TV sets a hot seller in West Germany.

Readymade Profit. The roster of top European executives today reflects profound changes in Europe's business community. Before World War II, most big European companies were owned and run by clannish, long-established families that kept their business affairs strictly secret, regarded advertising as an unnecessary extravagance and shunned public attention. The goal was high profit on low volume, and membership in a tidy cartel generally eliminated the danger of painful competition over prices and markets. A rigid class system kept workers from rising into executive ranks; the notion of increasing national buying power by raising wages was regarded as radical nonsense.

But war and rough-and-tumble reconstruction made way for new men and new ideas. Wily Dino de Laurentiis, who has revitalized Italy's film industry by making movies (War and Peace, Attila) with international casts and the specific purpose of tapping international markets, is the son of a small Neapolitan pasta manufacturer. In Britain, neither George Harriman, who as head of British Motor Corp. is the United Kingdom's biggest automaker, nor Financier Charles Clore, who has won fame as London's "Takeover King," can boast the once-traditional public school and university background.

The rise of the new men has not yet wiped out the European conviction that a company's profit figures are to be guarded like nuclear secrets. But to a growing degree, European executives are recognizing that public opinion does affect their business. Though his predecessor as chairman of Belgium's Societe Generale was so aloof that he Defused even to release his photo for publication, new Chairman Max Nokin freely allows both pictures and interviews in an effort to counter charges that his firm is meddling in Congolese politics. More important, with European workers now earning better wages, their employers are finding that their best market is at home, increasingly aim for greater volume at lower markups and strive to meet mass tastes. Onetime racing driver Count Giannino Marzotto, managing director of Italy's biggest textile firm, daringly steered his family-owned company into ready-to-wear clothes despite warnings that he was bound to fail, has succeeded so grandly that he now oversees a thriving chain of 20 inexpensive-clothing stores throughout Italy.

Der Amerikaner. Along with Marzotto, many a European firm that is still family dominated has changed its ways to get ahead. Though his uncle founded the company, Frits Philips, president of The Netherlands' giant (1961 sales: $1.4 billion) Philips Lamp, is proud that members of his family now own less than 1% of the stock. "If the stockholders decide I am doing a bad job," says Philips, "I go." And in Germany, where hired managers have traditionally been regarded with distrust, Steel Scion Alfried Krupp has given unprecedented authority to his general manager, Berthold Beitz. Among old-line Krupp executives, Beitz's breezy manner has won him the not entirely complimentary nickname der Amerikaner, but he has succeeded in diversifying the company from purely heavy industry into trading and construction.

Like Beitz, many of Europe's new business leaders on the surface increasingly resemble their U.S. counterparts. But important differences will always remain--if for no other reason than that so much of European business is nationalized. Contrary to what most Americans might expect, some of Europe's ablest managers are civil servants who drive to expand their industrial empires with a zeal worthy of any capitalist. Says Civil Servant Pierre Dreyfus, who has built France's state-owned Renault company into one of the world's most efficient auto producers: "We have no reason to be nationalized unless we serve France--but on one condition: we must not lose money."

Expanding Horizons. For all of Europe's managers the Common Market has rolled back horizons. A Ruhr industrialist, who a few years ago entertained foreigners only on formal occasions, now thinks nothing of inviting a clutch of executives from other Common Market nations to drop by for cocktails. West German Electrical Magnate Ernst von Siemens flatly declares that any executive who hopes to rise in his company must first cut the mustard in a Siemens branch abroad. Belgium's Nokin is particularly proud of presiding over the first truly "European" steel company: the big (1.1 million ton capacity) Sidmar mill that the Societe Generale plans to build in conjunction with French, Dutch, Italian and Luxembourg investors.

Shared markets have also led European manufacturers to move closer to one another in product styling. Since Genoa Industrialist Enrico Piaggio sent his Vespa motor scooters swarming through Europe as the first postwar apostles of the Italian look, Italy has become firmly established as the fountainhead of European design. Britain's Clore, whose multitudinous holdings include a corner on 22% of the British shoe market, makes periodic Italian tours to keep up with the latest in footwear; British Motor Corp.'s Harriman turned to Italian Stylist Pinin Farina to design autos that would sell better on the Continent. Harriman has also tailored his autos to continental tastes in less visible ways, e.g., learning that Germans like slow-revving engines, he heightened the gear ratios on the cars that he sent to Germany. Result: though B.M.C. must buck steep tariff walls so long as Britain is not a member of the Common Market, its exports to the Continent are running twice as high as they were a year ago, now exceed its sales to the U.S.

How Big? For some of Europe's business leaders, the bigness of the Common Market offers welcome protective coloration. Most relieved of all is Max Nokin, whose Societe Generale, a combination holding company and investment bank, is estimated to control 10% or more of Belgium's economic life. Cries Nokin: "Let us quickly become sixth or eighth in the Common Market rather than first in Belgium."

In most cases, however, the vast size of the Common Market simply spurs Europe's managers to seek greater growth. It was largely to brace Britain's already giant Imperial Chemical Industries against prospective Common Market competition that I.C.I. Chairman Stanley Paul Chambers launched his ill-fated attempt late last year to take over Courtaulds, Britain's biggest synthetic-fiber maker (TIME, Jan. 26 et seq.). On the same grounds, France's Saint-Gobain, Europe's biggest glass manufacturer and a burgeoning chemical maker, recently set up a joint market venture with Pechiney, another French chemical outfit. "We would probably have merged some day anyhow," says Saint-Gobain President Count Arnaud de Vogue, "but the Common Market made us do it faster."

Not all of Europe's big businessmen are totally reconciled to the notion of all-out competition. Belgium's Nokin and The Netherlands' Philips are both clearly worried lest the Common Market Executive in Brussels cracks down too harshly on pricing agreements among European manufacturers. But unlike some politicians within the Six, the European business community is almost unanimous in favoring Britain's prompt admittance to the Common Market. And if, as most of the businessmen ardently desire, the economic unity of the Common Market ultimately leads to political unity, Europe's business leaders will be able to boast with justice that they have contributed mightily to creating a climate in which the centuries-old rivalries of the Continent could be submerged in a new community of interest.

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