Local Man Makes Good

Some of the best American executives, like some of the best French wines, do not travel very well. When sent across to manage European subsidiaries, U.S. businessmen (and their wives) may stumble over the local language, bruise local sensibilities, and hanker to return to the center of power back at the home office. For this reason--and for a lot of others--U.S. companies are increasingly turning over control of their foreign outposts to European-bred local managers. Says Arthur K. Watson, chairman of IBM's international subsidiary: "It is far easier to develop company spirit in a European than it is for an American to develop an understanding of a foreign country's history, culture and customs -- to say nothing of its language."

U.S. companies now have more than 3,000 subsidiaries in Europe, and the percentage of big ones bossed by local citizens has risen to 40% in Italy, 55% in Britain and 65% in West Germany. Such giants as Woolworth, Singer, Eastman Kodak and National Cash Register make a point of manning all their top posts with Europeans. More and more Europeans are being promoted to high commands in Jersey Standard, Corn Products, Socony Mobil and U.S. Rubber. What these companies have brought forth is an urbane and multilingual group of managers who combine European emotions with U.S. business methods-- and make the most of both.

Comfortable Jargon. The Europeans can often talk tougher and act more decisively than the Americans abroad. Pleading for a boost in productivity at Ford Motor Co.'s British branch, Manchester-born Managing Director Allen Barke told 60,000 workers: "Britain's image abroad is lousy" -- and they applauded his pep talk. Thanks to management training at their U.S. home offices and such business schools as Harvard and Stanford, the European executives can comfortably speak the jargon of U.S. business ("parameters," "public relations," "cost control"), but they switch on their local dialects to good advantage when dealing with customers, competitors or labor leaders. Their mere presence helps to blunt occasional arguments from rivals that the government should not give contracts to U.S.-owned firms. Says Gulf Oil's Italian Chief, Prince Nicolo Pignatelli: "If you want to shoot a lion, you had better take along somebody who understands lions. Otherwise, the lion may eat you."

Most important, the local managers have a feel for the hard-to-define difference in mentality between the old world and the new. Esso's chief in Italy, Vincenzo Cazzaniga, has persuaded his home office to buy tens of millions of dollars worth of ships from Italian shipyards--even though the cost is greater than elsewhere. The gesture burnishes Esso's image in the eyes of the Italian people and the government. Small gestures are also important. No German businessman would ever think of dining at a customer's house without bringing flowers for the hostess; no Dutchman would ever ask a prospective client out to lunch without first weighing whether the guest might deem the offer a subtle bribe.

Father to Son. Many European businessmen believe that they can learn more, earn more and move faster with American firms, and some of them have jumped through hoops to make contact with the U.S. Belgium's Philippe Smaelen became an interpreter for the U.S. Army as a teen-ager during World War II, has since risen to head Du Font's paint operations for Europe, Africa and the Middle East. The local managers seldom quit, and the few who do usually leap to higher jobs in other American firms. Frank Pepermans, a onetime Olympic water-polo player who rose from Ford's assembly line in Antwerp to managing director of the company's Belgian subsidiary, recently became chief of Belgium's third largest company--a local branch of International Telephone & Telegraph.

The trend to local managers has lately started to spread out of Europe to Japan, Brazil and other countries, and it has already spawned a second generation of managers on the Continent. Example: the head of Kodak's German branch, Helmut Nagel, succeeded his father in that job. Though such men know that they have only a slim chance of rising to the presidency of the U.S.-based parent company, they figure that they are well ahead of their European compatriots. Says Paris-based Jacques Maisonrouge, IBM's 41-year-old top executive in Europe: "If I worked for a European-owned company, I would not be as high as I am now. I'm too young."

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